unit-economics

Calculate LTV:CAC ratio and payback period by analyzing customer acquisition costs against lifetime value and net retention metrics. This provides a complete view of SaaS profitability and customer economics for recurring revenue models.

Build an ARR cohort analysis matrix by tracking beginning ARR, new ARR, expansion, contraction, and churn by vintage. This reveals gross and net retention trends, logo churn, and expansion rates across subscription cohorts.

Assess revenue quality for PE targets by evaluating ARR bridges, retention metrics, and margin waterfalls across revenue streams. This benchmarks subscription businesses against standard SaaS metrics to validate profitability.

Use cohort analysis to model a margin waterfall by mapping margins against revenue streams and customer vintages. This isolates expansion revenue impact and contraction effects on overall profitability for SaaS targets.

An ARR bridge tracks stepwise changes from beginning to ending ARR, isolating new sales, expansion, contraction, and churn. You need it when evaluating revenue quality or building cohort analysis matrices for SaaS targets.

Customer economics analysis matters because it benchmarks LTV, CAC, and net retention against SaaS metrics to validate profitability. It exposes whether acquisition costs align with lifetime value and payback expectations.