NRR, churn, LTV, CAC: the SaaS metrics that determine your valuation in 2026

The SaaS M&A market has developed its own valuation language, a set of standardised metrics that allow acquirers to evaluate and compare assets of different sizes and verticals. This guide covers the most important metrics, with their exact definition, 2026 benchmarks, and their weight in constructing the multiple.

NRR, Net Revenue Retention

NRR = (beginning ARR + expansions + reactivations − churns − contractions) / beginning ARR × 100. Measures revenue growth from existing customers over 12 months. NRR > 100%: existing customers generate more revenue this year than last year, without counting new customers. 2026 benchmarks (OpenView Partners SaaS Benchmarks): median NRR = 102%, top quartile = 115%+, mature B2B vertical SaaS = 108%.

Churn Rate (MRR Churn and Logo Churn)

Logo churn: % of customers who leave. MRR churn: % of revenues lost. In M&A, MRR churn is prioritised as it measures real financial impact. 2026 benchmarks (ChartMogul): median monthly MRR churn = 0.8% (~9.6%/year), top quartile = 0.4% (~4.8%/year). Above 2%/month (~21%/year), the asset requires strong justification to avoid discounting.

GRR, Gross Revenue Retention

GRR = (beginning ARR − churns − contractions) / beginning ARR × 100. Does not count expansions. "Floor" indicator: % of current revenues still present in 12 months without new sales. GRR can never exceed 100%. 2026 benchmark: median B2B SaaS GRR = 91%, top quartile = 95%+.

LTV / CAC Ratio

LTV (Customer Lifetime Value) = ARPU × Gross margin / Monthly churn. CAC (Customer Acquisition Cost) = marketing + sales spend / new customers acquired. LTV/CAC > 3 is the minimum threshold for a healthy SaaS asset. LTV/CAC > 5 positions the asset in the top quartile and justifies a premium multiple. 2026 benchmark: median B2B SaaS LTV/CAC = 4.2x (OpenView).

CAC Payback Period

CAC Payback = CAC / (Monthly ARPU × Gross margin). Measures the number of months required to recover the cost of acquiring a customer. CAC Payback < 12 months is excellent and reassures acquirers on commercial efficiency. Between 12 and 24 months, acceptable. Above 24 months, the asset consumes more cash than it generates in the short term, risk if growth slows.