The software-as-a-service (SaaS) sector continues to mature, showing both scale advantages and efficiency pressures as competition intensifies and investor expectations shift toward profitability. The 2025 SaaS Metrics Benchmark Report offers a comparative analysis of key performance indicators—Customer Acquisition Cost (CAC), Lifetime Value (LTV), Churn, Net Dollar Retention (NDR), and the Rule of 40—across company stages, revenue bands, and market segments. The report combines survey data from over 400 SaaS firms globally with secondary financial disclosures and private equity benchmarks to deliver a comprehensive view for executives and investors.

Market Overview

The median SaaS company surveyed in 2025 achieved annual recurring revenue (ARR) growth of 28%, slightly down from 31% in 2024. The slowdown reflects tighter capital markets and heightened scrutiny on efficient growth. Early-stage SaaS firms (ARR < $5M) reported median CAC payback periods of 20 months, while mid-market players ($10M–$50M ARR) saw a median of 17 months. Growth-stage firms above $100M ARR achieved shorter payback periods at 13 months, signaling operational scalability.

CAC and LTV Trends

Customer Acquisition Cost continues to vary widely across market tiers and go-to-market motions. The median CAC for inbound-led SaaS firms stood at $11,800 per new customer, while outbound-heavy models averaged $19,500. Vertical SaaS companies, benefiting from niche specialization, showed superior unit economics with a median LTV/CAC ratio of 4.3x compared to 3.1x for horizontal SaaS vendors.

Stage	25th Percentile CAC ($)	Median CAC ($)	75th Percentile CAC ($)	LTV/CAC Ratio
Early (<$5M ARR)	7,500	10,200	14,800	2.8x
Mid ($10–50M ARR)	9,400	15,500	22,600	3.6x
Late (>$100M ARR)	14,000	19,200	27,400	4.1x

Retention economics improved among the top quartile performers where CAC efficiency was driven by expansion revenue and higher gross margins. Companies meeting the “magic number” threshold (>0.7) consistently reported shorter cash recovery cycles and elevated valuation multiples.

Churn and Retention Benchmarks

In aggregate, the median annual gross revenue churn stood at 11.4%, down from 13.2% the prior year. Enterprise-facing SaaS vendors maintained stronger customer retention with median gross churn of 7.6%, compared to 15.9% for SMB-focused models. Gross dollar retention at the 75th percentile reached 92%, while net retention (including upsells and cross-sells) surpassed 118% for the top quartile. Notably, best-in-class enterprise SaaS firms continued to post NDR exceeding 130%, a key marker of durable revenue growth.

Customer Segment	Gross Retention (%)	Net Dollar Retention (%)
SMB	84	104
Mid-Market	88	112
Enterprise	92	126

Net Dollar Retention by ARR Band

Net Dollar Retention remains the single most predictive indicator of sustainable SaaS growth. The strongest correlation observed was between NDR and valuation multiples (r = 0.71). Companies with ARR above $50M and NDR >120% commanded enterprise value-to-revenue (EV/Revenue) ratios roughly 50% higher than peers below the 100% mark. Improving product stickiness, introducing tiered pricing, and layering usage-based components were cited as winning strategies among top performers.

ARR Band ($M)	25th Percentile NDR (%)	Median NDR (%)	75th Percentile NDR (%)
<5	90	101	110
5–20	96	107	119
20–50	100	115	125
50+	108	122	134

Rule of 40 Performance

The “Rule of 40” (growth rate + profit margin ≥ 40%) continues to serve as a north star for SaaS efficiency. In 2025, 46% of surveyed firms met or exceeded the threshold, up slightly from 43% in 2024. Among that cohort, the median growth rate was 32%, and the median EBITDA margin was 13%. Companies under $10M ARR often achieved strong growth (>45%) but suffered from negative margins averaging -18%, while late-stage peers balanced moderate growth (22%) with margins above 20%, reflecting maturation and disciplined cost management.

Company Stage	Growth Rate (%)	EBITDA Margin (%)	Rule of 40 Score
Early	48	-18	30
Mid	35	5	40
Late	22	21	43

Sales Efficiency Metrics

Magic Number and Payback Period

The median SaaS “magic number”—a measure of sales efficiency calculated as net new ARR divided by prior-quarter sales and marketing spend—held steady at 0.65. Top-quartile performers exceeded 0.9, indicating highly efficient go-to-market motions. Payback periods followed a similar pattern: early-stage firms averaged 20 months, mid-stage firms averaged 15, and late-stage companies achieved sub-12-month recovery on marketing investments. Companies employing product-led growth (PLG) strategies reported the shortest payback cycles, often as low as nine months, due to organic, user-driven expansion.

Variations by Company Size and Market

Benchmarks differ significantly across geographic markets and company scales. North American SaaS firms maintained higher NDR (median 113%) and lower CAC payback (15 months) compared with EMEA companies (NDR 106%, payback 18 months). Vertical SaaS and AI-powered platforms were the standout subsegments, each demonstrating above-median growth and recurring margin expansion, supported by automation and specialized integration value.

• Vertical SaaS: Median ARR growth 36%, NDR 120%, Rule of 40 compliance in 52% of firms.
• Horizontal SaaS: Median ARR growth 25%, NDR 108%, Rule of 40 compliance in 41% of firms.
• AI-driven SaaS platforms: Median CAC payback 11 months and LTV/CAC 4.8x, outperforming legacy peers.

Strategic Implications

As the funding climate shifts toward sustainable profitability, efficiency metrics—not just top-line growth—define valuation premiums. Executives should prioritize initiatives that enhance retention (through stronger product adoption data) and shorten CAC payback via content-led demand generation and PLG motions. Benchmark alignment also aids capital allocation decisions; companies lagging in NDR or Rule of 40 should focus on pricing optimization and measured operating leverage.

Looking forward to 2026, SaaS leaders who balance efficient growth, disciplined capital allocation, and differentiated product ecosystems will define the next cohort of outperformers. In a capital-constrained environment, mastering these benchmarks is no longer optional—it is existential.