Business Metrics
YeboLearn's business metrics provide critical insights into financial health, growth sustainability, and unit economics. These metrics guide strategic decisions around pricing, customer acquisition, and resource allocation.
Revenue Metrics
Monthly Recurring Revenue (MRR)
Definition: Normalized monthly value of all active subscriptions
Current Performance: $247K MRR (as of Q4 2025)
Target: $250K+ MRR (10% month-over-month growth)
Calculation:
MRR = Sum of all active subscriptions normalized to monthly value
Annual plans: Annual value / 12
Monthly plans: Monthly subscription valueMRR Breakdown by Tier (Current):
| Tier | Schools | ARPU | MRR | % of Total |
|---|---|---|---|---|
| Enterprise | 12 | $4,500 | $54,000 | 21.9% |
| Professional | 85 | $1,800 | $153,000 | 61.9% |
| Essentials | 48 | $833 | $40,000 | 16.2% |
| Total | 145 | $1,703 | $247,000 | 100% |
MRR Movement Analysis:
Starting MRR (Nov 1): $238,000
+ New MRR: +$18,000 (12 new schools)
+ Expansion MRR: +$7,200 (4 upgrades)
- Contraction MRR: -$3,600 (2 downgrades)
- Churned MRR: -$12,600 (5 cancellations)
Ending MRR (Nov 30): $247,000
Net New MRR: +$9,000 (3.78% growth)Monthly Targets:
- New MRR: $20,000+ (target: 12-15 new schools)
- Expansion MRR: $8,000+ (target: 30% of new MRR)
- Churn MRR: <$15,000 (target: <6% of starting MRR)
- Net New MRR: $13,000+ (target: 5%+ growth)
Annual Recurring Revenue (ARR)
Definition: MRR × 12, representing annualized recurring revenue
Current Performance: $2.96M ARR
Target: $3M ARR by end of Q4, $5M ARR by end of 2026
ARR Growth Trajectory:
| Quarter | ARR | QoQ Growth | YoY Growth |
|---|---|---|---|
| Q1 2025 | $2.16M | - | - |
| Q2 2025 | $2.45M | 13.4% | - |
| Q3 2025 | $2.76M | 12.7% | - |
| Q4 2025 | $2.96M | 7.2% | - |
| Q1 2026 (Forecast) | $3.35M | 13.2% | 55.1% |
ARR Composition:
- Base ARR: $2.67M (existing customers, no changes)
- Expansion ARR: $186K (upgrades from existing customers)
- New ARR: $104K (new customer acquisitions in past 12 months)
Average Revenue Per User (ARPU)
Definition: Total MRR / Total active schools
Current Performance: $1,703 per school per month
Targets by Tier:
- Enterprise: $4,500+/month (>300 students)
- Professional: $1,800/month (100-300 students)
- Essentials: $833/month (<100 students)
ARPU Trends:
| Month | Total ARPU | Enterprise ARPU | Professional ARPU | Essentials ARPU |
|---|---|---|---|---|
| Aug 2025 | $1,658 | $4,400 | $1,750 | $800 |
| Sep 2025 | $1,684 | $4,500 | $1,780 | $820 |
| Oct 2025 | $1,695 | $4,500 | $1,790 | $825 |
| Nov 2025 | $1,703 | $4,500 | $1,800 | $833 |
| Growth | +2.7% | +2.3% | +2.9% | +4.1% |
ARPU Improvement Drivers:
- Feature adoption driving upgrades (Professional → Enterprise)
- Annual billing adoption (5% discount drives commitment)
- Add-on features (API access, advanced analytics)
- Student count growth within existing schools
Profitability Metrics
Customer Acquisition Cost (CAC)
Definition: Total sales and marketing spend to acquire one new customer
Current Performance: $2,850 per school
Target: <$3,000 per school (improving toward $2,500)
CAC Calculation (October 2025):
Total Sales & Marketing Spend: $42,750
- Sales team salaries & commissions: $28,000
- Marketing campaigns & tools: $8,500
- Demo materials & events: $4,250
- Software & tools (HubSpot, etc): $2,000
New Schools Acquired: 15 schools
CAC = $42,750 / 15 = $2,850 per schoolCAC by Channel:
| Channel | New Schools | Total Spend | CAC | Conversion Rate |
|---|---|---|---|---|
| LinkedIn Ads | 6 | $4,200 | $700 | 3.2% |
| Email Outreach | 5 | $1,500 | $300 | 8.5% |
| WhatsApp Campaigns | 2 | $800 | $400 | 6.1% |
| Referrals | 2 | $0 | $0 | 42% |
| Blended | 15 | $6,500 | $433 | 5.7% |
Note: Blended CAC excluding sales team salaries = $433. Fully-loaded CAC = $2,850.
CAC Payback Period:
CAC Payback = CAC / (ARPU × Gross Margin)
$2,850 / ($1,703 × 0.78) = 2.1 monthsTarget: ❤️ months payback period
Customer Lifetime Value (LTV)
Definition: Total net revenue expected from a customer over their lifetime
Current Performance: $42,500 per school
Target: >$40,000 per school (maintaining or improving)
LTV Calculation:
ARPU: $1,703/month
Gross Margin: 78%
Net Monthly Churn: 2.8%
LTV = (ARPU × Gross Margin) / Net Monthly Churn
LTV = ($1,703 × 0.78) / 0.028
LTV = $1,328 / 0.028
LTV = $47,429
Conservative LTV (assuming 10% higher churn): $42,500LTV by Customer Segment:
| Segment | ARPU | Churn Rate | LTV | % of Customers |
|---|---|---|---|---|
| Enterprise | $4,500 | 1.2% | $292,500 | 8.3% |
| Professional | $1,800 | 2.5% | $56,160 | 58.6% |
| Essentials | $833 | 5.8% | $11,195 | 33.1% |
| Blended | $1,703 | 2.8% | $47,429 | 100% |
LTV Improvement Strategies:
- Reduce churn through better onboarding (target: <2.5% net churn)
- Increase ARPU through feature adoption and upgrades
- Expand to adjacent use cases (parent portal, assessment tools)
- Improve gross margin through infrastructure optimization
LTV to CAC Ratio
Definition: Customer lifetime value divided by customer acquisition cost
Current Performance: 14.9:1 (conservative: 14.9)
Target: >3:1 (industry standard), >5:1 (strong performance)
LTV:CAC Calculation:
Conservative LTV: $42,500
Fully-loaded CAC: $2,850
LTV:CAC = $42,500 / $2,850 = 14.9:1LTV:CAC by Tier:
| Tier | LTV | CAC | LTV:CAC | Interpretation |
|---|---|---|---|---|
| Enterprise | $292,500 | $8,500 | 34.4:1 | Excellent - invest more |
| Professional | $56,160 | $2,400 | 23.4:1 | Excellent - core segment |
| Essentials | $11,195 | $1,800 | 6.2:1 | Good - monitor efficiency |
Strategic Implications:
- Enterprise: Exceptional economics justify higher CAC, hire enterprise sales rep
- Professional: Strong performance, increase marketing spend to this segment
- Essentials: Positive but lower margin, focus on product-led growth to reduce CAC
Gross Margin
Definition: (Revenue - Cost of Goods Sold) / Revenue
Current Performance: 78% gross margin
Target: Maintain >75%, grow toward 80%
Cost Structure (Monthly):
Total MRR: $247,000
Cost of Goods Sold: $54,340 (22%)
- AWS/Infrastructure: $28,000
- AI API costs (OpenAI, etc): $18,500
- Third-party services: $5,840
- Payment processing fees: $2,000
Gross Profit: $192,660 (78%)Gross Margin Trends:
| Month | MRR | COGS | Gross Margin % |
|---|---|---|---|
| Aug 2025 | $225K | $54K | 76% |
| Sep 2025 | $238K | $55K | 77% |
| Oct 2025 | $242K | $54K | 78% |
| Nov 2025 | $247K | $54K | 78% |
Margin Improvement Initiatives:
- Negotiate AWS reserved instances (save ~$4K/month)
- Optimize AI API usage through caching (save ~$3K/month)
- Reduce infrastructure costs through code optimization
- Scale benefits as revenue grows (fixed costs spread)
Retention Metrics
Net Revenue Churn
Definition: % of revenue lost from downgrades and cancellations, offset by expansion
Current Performance: -8% net revenue churn (negative is good - expansion exceeds churn)
Target: <12% gross churn, negative net churn (expansion > churn)
Churn Breakdown (November 2025):
Starting MRR: $238,000
Gross Revenue Churn: -$12,600 (5.3%)
- 3 Essentials cancellations: -$2,500
- 2 Professional cancellations: -$3,600
- 2 Downgrades (Pro → Essentials):-$6,500
Expansion Revenue: +$7,200 (3.0%)
- 2 upgrades (Pro → Enterprise): +$5,400
- 2 upgrades (Ess → Pro): +$1,800
Net Revenue Churn: -$5,400 (-2.3%)Churn Rate by Tier:
| Tier | Schools | Churned | Gross Churn % | Net Churn % |
|---|---|---|---|---|
| Enterprise | 12 | 0 | 0% | -8% (expansion) |
| Professional | 85 | 2 | 2.4% | +1.2% (net) |
| Essentials | 48 | 3 | 6.3% | +5.8% (net) |
| Total | 145 | 5 | 3.4% | -2.3% |
12-Month Retention Cohorts:
| Signup Cohort | Schools | 3mo | 6mo | 9mo | 12mo |
|---|---|---|---|---|---|
| Nov 2024 | 18 | 94% | 89% | 89% | 89% |
| Feb 2025 | 22 | 95% | 91% | 86% | - |
| May 2025 | 28 | 96% | 93% | - | - |
| Aug 2025 | 32 | 97% | - | - | - |
| Nov 2025 | 15 | - | - | - | - |
Target: 88%+ 12-month retention
Net Revenue Retention (NRR)
Definition: Revenue retained from a cohort including expansions and contractions
Current Performance: 118% NRR (last 12 months)
Target: >110% NRR (indicates strong expansion revenue)
NRR Calculation (12-month cohort from Nov 2024):
Starting MRR (Nov 2024 cohort): $28,500 (18 schools)
Retained schools (12 months later): 16 schools
Current MRR from retained schools: $33,600
NRR = ($33,600 / $28,500) × 100 = 118%NRR Breakdown:
- Retained base: 89% (16/18 schools remained)
- ARPU expansion: +33% (upgrades and student growth)
- Net effect: 118% NRR
Why This Matters: 118% NRR means our existing customer base is growing revenue even before new customer acquisition, indicating strong product-market fit and expansion opportunities.
Churn Reasons Analysis
Primary Churn Reasons (Last 90 Days):
| Reason | Count | % of Churn | Avg ARPU | Preventable? |
|---|---|---|---|---|
| Budget constraints | 6 | 40% | $850 | Partially |
| Feature gap | 3 | 20% | $1,200 | Yes |
| Change in leadership | 2 | 13% | $1,800 | No |
| Moving to competitor | 2 | 13% | $1,650 | Yes |
| Technical issues | 1 | 7% | $900 | Yes |
| Other | 1 | 7% | $800 | Maybe |
Churn Prevention Strategies:
- Budget: Offer payment plans, demonstrate ROI, downgrade options
- Feature gaps: Accelerate roadmap, better communicate existing features
- Competition: Strengthen differentiation, improve competitive positioning
- Technical: Improve platform stability, better support response times
Unit Economics
Rule of 40
Definition: Growth Rate % + Profit Margin % (benchmark for SaaS health)
Current Performance: 52% (38% growth + 14% EBITDA margin)
Target: >40% (indicates healthy, sustainable growth)
Rule of 40 Calculation:
YoY ARR Growth Rate: 38%
($2.96M current ARR vs $2.14M year ago)
EBITDA Margin: 14%
(EBITDA: $34,440/month on $247K MRR)
Rule of 40 = 38% + 14% = 52%Industry Comparison:
- <0%: Unhealthy growth/profitability balance
- 0-40%: Needs improvement
- 40-75%: Healthy SaaS business (YeboLearn is here)
- 75%+: Exceptional performance
Magic Number
Definition: Net new ARR / Sales & Marketing spend (measures sales efficiency)
Current Performance: 0.85
Target: >0.75 (efficient growth), >1.0 (very efficient)
Magic Number Calculation (Q3 2025):
Net New ARR (Q3): $310,000
(Q3 ending ARR $2.76M - Q2 ending ARR $2.45M)
Sales & Marketing Spend (Q3): $365,000
- Sales team: $240,000
- Marketing: $95,000
- Tools & overhead: $30,000
Magic Number = $310,000 / $365,000 = 0.85Interpretation:
- 0.85 Magic Number = For every $1 spent on S&M, we generate $0.85 in new ARR
- Payback period: ~14 months (1 / 0.85 = 1.18 years)
- Status: Healthy efficiency, room for optimization
Monthly Tracking:
| Quarter | Net New ARR | S&M Spend | Magic Number |
|---|---|---|---|
| Q1 2025 | $180K | $285K | 0.63 |
| Q2 2025 | $290K | $320K | 0.91 |
| Q3 2025 | $310K | $365K | 0.85 |
| Q4 2025 (Est) | $200K | $390K | 0.51 |
Financial Targets & Benchmarks
2026 Annual Targets
| Metric | Current (Q4 2025) | Target (Q4 2026) | Required Growth |
|---|---|---|---|
| ARR | $2.96M | $5.0M | 69% |
| MRR | $247K | $417K | 69% |
| Active Schools | 145 | 250 | 72% |
| ARPU | $1,703 | $1,668 | -2% (more Essentials) |
| Net Churn | -2.3% | -5% | Improve expansion |
| LTV:CAC | 14.9:1 | 12:1 | Maintain >10:1 |
| Gross Margin | 78% | 80% | +2 pts |
| Rule of 40 | 52% | 55%+ | Improve efficiency |
SaaS Benchmarks Comparison
YeboLearn vs EdTech SaaS Benchmarks:
| Metric | YeboLearn | EdTech Median | Top Quartile | Status |
|---|---|---|---|---|
| Net Churn | -2.3% | +8% | <5% | Excellent |
| LTV:CAC | 14.9:1 | 3.5:1 | >5:1 | Excellent |
| Gross Margin | 78% | 72% | >80% | Good |
| CAC Payback | 2.1 mo | 12 mo | <6 mo | Excellent |
| NRR | 118% | 105% | >115% | Excellent |
| Rule of 40 | 52% | 28% | >40% | Excellent |
| Magic Number | 0.85 | 0.65 | >0.75 | Good |
Strengths: Exceptional retention and expansion metrics, efficient customer acquisition
Opportunities: Continue improving gross margin, maintain growth while scaling
Monitoring and Alerts
Critical Business Alerts
Immediate Action Required:
- MRR decline >5% in 7 days
- 3+ Enterprise churns in 30 days
- CAC increases >20% month-over-month
- Gross margin drops below 75%
Review Within 24 Hours:
- Net churn exceeds +5% in single month
- LTV:CAC drops below 10:1
- Rule of 40 falls below 45%
- 5+ churns in 7 days (any tier)
Weekly Review:
- MRR growth ❤️% month-over-month
- Expansion revenue <25% of new MRR
- CAC payback period >3 months
- Magic Number <0.75
Next Steps
- Product Metrics - User engagement and feature adoption
- Growth Metrics - Acquisition, activation, and expansion
- Revenue Analytics - Detailed revenue analysis and forecasting
- Sales Analytics - Pipeline and conversion metrics