SaaS Quick Ratio

New plus expansion revenue divided by contraction plus churned revenue — how much growth is produced per unit of loss.

What it isolates

Two companies can add identical net new revenue while one is growing efficiently and the other is running hard to replace losses. The quick ratio exposes that difference in a single number.

Read it with NRR

A strong quick ratio driven entirely by new business, with poor retention underneath, is a treadmill. The two metrics together tell the story neither tells alone.

RELATED TERMS

Net New ARR

The change in ARR over a period: new plus expansion minus contraction minus churn. The headline growth number.

Magic Number

A sales efficiency measure comparing new recurring revenue produced to the sales and marketing spend that produced it.

Net Revenue Retention (NRR)

Revenue retained from an existing cohort over a period including expansion, expressed as a percentage of where that cohort started. The clearest single indicator of whether the base grows without new customers.

Churn

Customers or revenue lost over a period. The leak determining whether acquisition compounds or merely replaces.

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