C4 · Economics & metrics · 12 metrics
GTM Metrics
Definitions with benchmark data by stage, motion, and regime.
12 GTM metrics with benchmark ranges by stage, motion, and regime. Each includes the formula, the naive version, and the corrected version (where they differ). Best-in-class: NRR > 120%, CAC payback < 12 months, Rule of 40 score > 60 (Bessemer 2024). The MRR walk is the only true identity — everything else is an estimator.
All 12 metrics
| Metric | Formula | Best-in-class | Type |
|---|---|---|---|
| Monthly Recurring Revenue (MRR) | MRR = sum of all monthly subscription values (normalized from any billing cadence to monthly) | $2M+/month | identity |
| Annual Recurring Revenue (ARR) | ARR = MRR × 12 | $100M+ ARR | identity |
| Customer Acquisition Cost (CAC) | CAC = Total Sales & Marketing spend / New customers acquired in the period | LTV:CAC > 3:1 | ratio |
| Customer Lifetime Value (LTV) | LTV (naive) = ACV / annual churn rate | LTV:CAC > 3:1 on gross margin | model-dependent |
| LTV:CAC Ratio (LTV/CAC) | LTV:CAC Ratio = (LTV × Gross Margin %) / Fully-Loaded CAC | > 5:1 | ratio |
| CAC Payback Period (CAC Payback) | CAC Payback = CAC / (ACV × Gross Margin %/ 12) | > 24 months | ratio |
| Net Revenue Retention (NRR) | NRR = (Beginning ARR + Expansion - Contraction - Churn) / Beginning ARR | < 85% | identity |
| Gross Revenue Retention (GRR) | GRR = (Beginning ARR - Contraction - Churn) / Beginning ARR | < 75% | identity |
| GTM Magic Number (Magic Number) | Magic Number = Net New ARR (this quarter) / S&M Spend (prior quarter) | > 1.5 | ratio |
| Burn Multiple (Burn Multiple) | Burn Multiple = Net Burn / Net New ARR | > 4x | ratio |
| Rule of 40 (Rule of 40) | Rule of 40 Score = ARR Growth Rate % + EBITDA Margin % | > 80 | heuristic |
| Rule of X (Rule of X) | Rule of X Score = (ARR Growth Rate % × X_factor) + FCF Margin % | > 60 (Rule of X) | model-dependent |