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2025

B2B SaaS Performance Metrics Benchmarks

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Top Findings

1. Growth Rates continue to decline with a median of 26% while the top growth quartile decreased from 60% in 2023 to 50% in 2024

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2. Net Revenue Retention at 101% highlights that retaining and expanding existing customers is becoming more challenging as companies increase their dependence on expansion ARR

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3. New CAC Ratio for new customers continues to rise - 14% higher in 2024

 

4. Blended CAC Ratio was down 10% - due to the increase in Expansion ARR to New ARR mix

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5. Expansion ARR represents 40% of Total New ARR - a 5% increase in 2024

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6. Expansion ARR represents over 50% of Total New ARR in companies greater than $50M

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7. Sales and Marketing as % of Revenue is 47% for VC-backed vs 33% for PE-backed companies

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8. R&D is at 34% of revenue for private SaaS companies versus 23% in public SaaS companies

 

9. ARR per FTE continues to climb in the $50M - $100M ARR segment at $200,000 per FTE

and at companies > $100M this increases to $300,000 per FTE​

Filter benchmarks by your company attributes below

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01

Customer Acquisition

New Customer CAC Ratio

Year Over Year (‘22 vs ‘23 vs ‘24)

Findings

  • New CAC Ratio measures the efficiency of adding New Customer ARR only

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  • New CAC Ratio calculation formula is: Total Sales & Marketing expenses / New Customer ARR

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  • In the “not so encouraging” category, the New CAC Ratio increased by 14% in 2024 to a median of $2.00 of Sales and Marketing expense to acquire $1.00 of New Customer ARR.

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  • Maybe more alarming is that the 4th quartile of companies are spending $2.82 at median to acquire $1.00 of New Customer ARR!

Companies are spending $2.00 at median to acquire $1.00 of New Customer ARR!

New Customer CAC Ratio

By Annual Contract Value

Findings

  • As with any other SaaS metric and its related benchmarks, the New CAC Ratio should be evaluated in context of the company attribute most correlated to the metric’s performance, which is Annual Contract Value (ACV) for this metric

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  • This year’s data provides a new insight into the efficiency of larger ACV deals (> $100K), which is lower than solutions in the $10K - $100K range and even lower than in the $25K - $50K range

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  • Leveraging automation and AI to decrease the dependency on higher cost resources, is one strategy to evaluate how best to reduce the New CAC Ratio for lower ACV solutions  in the $10K - $50K ACV range

NRR at 101% highlights that retaining and expanding existing customers is more challenging

Blended CAC Ratio

Year Over Year (‘22 vs ‘23 vs ‘24)

Findings

  • Blended CAC Ratio measures the efficiency of adding New Customer ARR plus Existing Customer Expansion ARR

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  • The Blended CAC Ratio formula is: Total Sales & Marketing expenses / New Customer ARR + Expansion ARR

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  • The Blended CAC Ratio benchmark decreased by $.19 in 2024, representing a 12% decrease

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  • As the same time, the Blended CAC Ratio ~ 10% higher than in 2022 - this should have us looping at new approaches to achieving revenue growth efficiency?

Blended CAC Ratio ~ 10% higher since 2022

Blended CAC Ratio

By Annual Contract Value

Findings

  • As with any other SaaS metric and its related benchmarks, Blended CAC Ratio should be evaluated in context of the company attribute most correlated to the metric’s performance, which is Annual Contract Value (ACV) 

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  • CAC Ratio will typically increase as ACV increases, as you can see from the above chart.  The one anomaly we have seen consistently is that solutions in the $10K - $50K ACV range are often more expensive to acquire than solutions in the $50K - $100K ACV range.  This is not a one year exception, thus pricing in the should be considered accordingly

$10K - $50K ACV solutions are often more expensive to acquire than in the $50K - $100K ACV range

CAC Payback Period (Months)

Year Over Year (‘22 vs ‘23 vs ‘24)

Findings

  • CAC Payback Period (CPP) measures how many months it takes to “payback” the Sales and Marketing Expenses for new customers - on a Gross Margin adjusted basis

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  • It is a simple way to understand if your new customer acquisition investments are efficient.  Common wisdom often says ~12 months CAC Payback Period is good - but this metric is highly correlated to ACV as you will see on the next chart

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  • CAC Payback Period provides a high level understanding of customer acquisition performance, but does not provide the granularity of CAC efficiency provided by the CAC Ratio

CAC Payback Period has increased 12.5% at median since 2022

CAC Payback Period (Months)

By Annual Contract Value

Findings

  • As with any other SaaS metric and its related benchmarks, CAC Payback Period should be evaluated in context of the company attribute most correlated to the metric’s performance, which is Annual Contract Value (ACV) for this metric

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  • This year’s data provides a new insight into the efficiency of larger ACV deals (> $250K), which is materially lower than solutions in the $50K - $100K range and even lower than in the $25K - $50K range

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  • This finding is consistent with the lower New CAC Ratio for > $100K ACV products - this suggests that an Enterprise solution that requires more time and resources to win may actually be more profitable over time

CAC Payback Period benchmarks should be evaluated in context of annual contract value

02

Customer Retention

Gross Revenue Retention Rate

Year Over Year (‘22 vs ‘23 vs ‘24)

Findings

  • Gross Revenue Retention (GRR) measures what percentage of existing customers ARR remains over time without the benefit of expansion ARR.  Typically measured Year over Year or on a trailing 12-month period.
    Best practice is to calculate this on a “cohort basis”.

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  • It is also very important to note that this does not include new customer ARR or existing customer expansion ARR

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  • GRR has continued to decrease  slightly over the past three years from 90% to 88% - though this could be due to selection bias of participants
     

GRR's continued slight decrease over the past three years is a potential canary in the coal mine

Gross Revenue Retention Rate

By Annual Contract Value

Findings

  • The ‘24 GRR benchmarks are consistent with the past 4 years of findings that as ACV increases so does GRR

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  • Analyzing GRR by both customer segment(s) and product is a best practice

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  • Gross Revenue Retention (GRR) benchmarks are best analyzed by ACV

GRR and Annual Contract Value are correlated

03

Customer Expansion

Existing Customer Expansion ARR continues to increase its contribution to Total New ARR

Expansion ARR Contribution to Total New ARR (%)

Year Over Year (‘22 vs ‘23 vs ‘24)

Findings

  • Existing Customer Expansion ARR continues to increase its contribution to Total New ARR.

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  • The chart highlights the median contribution is 40% which has increase 5 percentage points YoY

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  • The next page and chart shows how this contribution changes as companies scale in ARR size

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  • Other factors impacting this benchmark include pricing model used and product portfolio breadth (i.e. number of products for cross-sell and upsell opportunities)

Expansion ARR to Growth ARR %

By Annual Recurring Revenue

Findings

  • The benchmarks continue to highlight that as companies scale, they increase the focus and contribution of expansion ARR to Total New ARR through the combination of increased priority, resources allocated, pricing/packaging and product portfolio investments to increase the number of products to increase cross-sell opportunities

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  • The largest companies (> $50M) has dramatically increase the contribution of Expansion ARR which was ~ 50% in 2023 and have increased in ‘24 to a median of 58% ($50M - $100M) 67% in companies in the > $100M - though the > $100M cohort was limited to only six companies

Larger companies (> $50M) have a greater contribution of Expansion ARR to Total New ARR

04

Operational Efficiency

Growth Rate (‘24)

By Annual Recurring Revenue

Findings

  • Private companies participating in this research are growing closer to the growth rate (7% median) of public companies below $500M, but almost 50% slower than the median growth rate (13%) of public SaaS companies     > $500M

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  • Growth rate benchmarks are best analyzed based on a SaaS company’s revenue size as they decrease at each level of growth - this growth rate decline is captured in a  heuristic metric called “Growth Endurance”

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  • Growth endurance is the rate at which growth is retained from year to year.  Growth endurance benchmark used to be ~ 80%, but over the last two years this has decreased to ~ 65%

Private company growth rates are closer to the growth rate of public companies below $500M 

Planned Growth Rate (‘25)

By Annual Recurring Revenue

Findings

  • As with any other SaaS metric and its related benchmarks, Planned Company Growth Rate should be evaluated in context of the company attributes that are correlated to the metric - which in this case is company size

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  • As in the total population chart - it is also interested to note that companies in every revenue range are planning for higher growth rates in 2025 than the actual 2024 growth rate

Companies of all sizes are planning for higher growth rates in 2025 than 2024 actual growth rates

Growth Rate (‘24) vs Planned Growth Rate (‘25)

By Total Population

Findings

  • We captured the previous years’ growth rate versus current year for the first time in 2024.  It was consistent in companies < $50M to see an increased current year planned growth rate vs previous year actuals

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  • We again see the optimistic nature of SaaS companies, where they are planning a median growth rate of 35%, whereas the median growth rate in 2024 was only 26%

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  • At the time of this report being published it is important to analyze current trends and consider a 2H-25 adjustment

05

Human Capital Efficiency

ARR per Employee

By Annual Recurring Revenue

Findings

  • One of the most positive trends in B2B SaaS is the increasing ARR per FTE at each stage of  especially in the $20M ARR and above segments

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  • The increased focus on operating expense and headcount control, including an evolving strategy not to immediately replace attrition with new headcount until an evaluation of what can we automate or increase productivity with AI

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  •  We predict the ARR per FTE increase will continue to increase as legacy SaaS firms are being evaluated against native-AI and Agentic AI companies with 2x - 3x higher productivity (ARR per FTE)

One of the most positive trends in B2B SaaS over the past 2 years has been the increased ARR per FTE

Sales and Marketing Expenses to Revenue (%)

By Annual Recurring Revenue

Findings

  • Sales and Marketing expenses typically increase as a company scales beyond $5M - $10M due to the additional of many more direct sales resources, sales development representatives and Marketing investments in people and program to generate the additional pipeline required to support high growth ARR, early-stage companies

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  • It is interest to note that private companies > $100M ARR are investing 33% (median) of revenue in Sales and Marketing, which is exactly the same as Public SaaS companies invest in Sales and Marketing

Private companies > $100M ARR invest 33% (median) of revenue in S&M - similar to public companies 

The percentage of revenue allocated to R&D is higher than in previous years - impact of new AI features?

Research and Development Expenses to Revenue (%)

By Annual Recurring Revenue

Findings

  • A very interesting change in this year’s benchmarks is that the percentage of revenue allocated to R&D in companies (< $5m ARR) is lower than in previous years.  Though we are not sure of the exact cause of this change - the evolution of AI enable SW development with tools like Cursor - this is an interesting trend to watch

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  • It is also interesting to note that as SaaS companies scale and are being faced with the constant innovation of AI-Native companies, the investment in R&D has increased at each stage of growth over previous years.  This is a benchmark that we will be doing additional research to understand why this trend appeared in 2024

06

Capital Efficiency

Burn Multiple

By Annual Recurring Revenue

Findings

  • The burn multiple measures how much cash is being burned in a period divided by Net New ARR. This  metric was popularized by David Sacks at Craft Ventures as a metric to measure the efficiency of growth. The Bessemer Ventures “Efficiency Score” is very similar, but it switches the numerator to Net New ARR divided by Net Burn

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  • The Burn multiple decreases as a company scales with the goal to reach < 1.0 at the $25M - $50M range and over time become a negative number - meaning that a company generates more New ARR than cash burned  to generate New ARR

07

Comparative Metrics

New Name vs Blended vs Expansion CAC Ratio

By Total Population

Findings

  • This chart highlights the value of calculation Blended, New and Expansion CAC Ratio

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  • With Expansion CAC Ratio at a $1.00 median versus New CAC Ratio at $2.00 it could materially impact decisions on where best to grow top line ARR across new and/or existing customers

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  • Consider the need to grow $10M in ARR, and the prioritization decision needs to be made between resources invested towards New Logo vs Existing Customer Expansion?

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  • CAC Ratio is a very instructive metric!

Understanding Expansion CAC Ratio and New CAC Ratio will impact decisions on how to grow New ARR

Operating Expenses as a Percentage of Revenue

By Total Population

Findings

  • This benchmark chart shows at once glance the Operating Expenses by department for the follow functions:

    • Sales and Marketing (37% median)

    • R&D (34% median)

    • G&A (24% median)

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  • Benchmarks can be skewed by the mix of participants which is one reason OPEX expense as a percentage of revenue should be evaluated by both company size and primary funding sources, as both are highly correlated to the benchmarks

OPEX expense as a percentage of revenue should be evaluated by company size and primary funding source

Gross Margin - Total Revenue vs Subscriptions vs Services

By Total Population

Findings

  • This benchmark chart show at once glance the Gross Margins for:

    • Total Revenue (77% median)

    • Subscription Revenue 81% median)

    • Pro Services Revenue (30%)

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  • Though we are not showing the actual benchmark chart - Professional Service at median represents ~15% of total revenue

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  • If a SaaS company’s mix of Professional Services revenue to Subscription revenue exceeds 15-20% of total revenue and/or if Services Gross Margin is lower than 30%, the Total Gross Margin is likely to be lower than the median benchmark  of 77%

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