Mastering SaaS metrics for informed decision making

From the 2025 Technology Finance Symposium - West

Baker Tilly’s Chris Price led a session on the essential role SaaS metrics play in strategic decision-making. Drawing on hundreds of conversations with CFOs and finance leaders, Price walked the audience through practical advice for refining financial reporting and operational analytics as SaaS companies grow.

Price opened by addressing the overwhelming number of metrics companies track as they scale. His guidance: stay focused on a handful of metrics that truly matter at each stage of growth. “What you don't want to be doing is trying to manage and monitor all of them,” Price said. Instead, he advised zeroing in on five to six core indicators that align with current business objectives while evolving the metrics set as complexity increases.

A recurring theme in the session was the critical importance of accurate, consistent definitions — particularly for non-GAAP metrics like Annual Recurring Revenue (ARR). Price highlighted how reliance on GAAP revenue reporting for SaaS metrics often leads to distortions, especially with partial-period billing, delayed service delivery, and late renewals. To avoid misleading data, he recommended a contract-based approach that treats ARR as a measure independent of revenue recognition timing.

Price also underscored ARR’s foundational role in calculating other key SaaS performance indicators like customer acquisition cost (CAC), payback periods, and lifetime value (LTV). Misstating ARR, he cautioned, can cascade into flawed decision-making across multiple areas of the business.

Looking ahead, Price acknowledged the growing complexity posed by usage-based pricing models and AI-related consumption. He pointed to evolving concepts like “variable ARR” (vARR) and “implied ARR” as ways companies are starting to address the challenges of forecasting and tracking revenue in these environments.

The session closed with a call for finance teams to take ownership of the company’s data culture. Price encouraged organizations to invest early in clean, centralized data and scalable tools. While acknowledging the temptation to manage early-stage metrics in spreadsheets, he warned against letting those models linger too long. “You will start incurring technical debt that will come back to bite you,” he noted.