The SaaS Quick Ratio measures the quality of your growth. Coined by Mamoon Hamid at
Kleiner Perkins, it asks: for every dollar of MRR you lose, how many dollars of new
MRR are you generating?
The formula
Quick Ratio = (New MRR + Expansion MRR) / (Contraction MRR + Churned MRR)
A company adding $50k new MRR and $15k expansion MRR, while losing $5k to contraction
and $10k to churn, has a Quick Ratio of 65/15 = 4.3x — exceptional.
Why Quick Ratio matters more than gross growth
Two companies can have identical gross MRR growth rates but very different quick ratios.
A company at 30% gross MRR growth with 20% churn has a Quick Ratio of ~1.5x — the
churn is eating most of the growth. Another company at 30% gross growth with 5% churn
has a Quick Ratio of ~6x — a fundamentally healthier business.
Investors use Quick Ratio to separate genuine growth from "running on a treadmill."
Benchmarks
Quick Ratio
Assessment
> 4x
Exceptional — world-class SaaS growth quality
2–4x
Healthy — fundable, investable growth
1–2x
Marginal — growing faster than losing, but barely
< 1x
Declining — losing more MRR than gaining
Quick Ratio vs NRR vs Burn Multiple
NRR (Net Revenue Retention): % of last year's ARR you still have + expansion. Excludes new logos (SaaS shorthand for new customer accounts).
Quick Ratio: Growth MRR / lost MRR. Includes new logos. Measures acquisition + retention together.
Burn Multiple: Net burn / net new ARR. Measures capital efficiency of all that growth.
The Quick Ratio is the best single metric for measuring the quality of your MRR growth.
A high Quick Ratio with a good Burn Multiple and high NRR signals a capital-efficient,
sticky, growing SaaS business — the trifecta investors want to see.
How to improve your Quick Ratio
Expand existing accounts — expansion MRR costs 3–7x less than acquiring new logos
Reduce logo churn — one churn prevention saves as much as one new acquisition
Segment your churn — identify which cohorts churn most and fix the onboarding for them
Build expansion loops — usage-based pricing, seat expansion, and add-on modules all drive expansion MRR
Increase new MRR — growth always helps, but retention improvements have compounding effects
Frequently asked questions
What does this calculator do?
Calculate your SaaS Quick Ratio from monthly MRR movements to measure the quality and
sustainability of your revenue growth.
What Is SaaS Quick Ratio? Definition, Formula, and Benchmarks
Learn the SaaS Quick Ratio formula — (New MRR + Expansion MRR) / (Contraction MRR + Churned MRR) — and how to benchmark your growth quality.
SaaS Quick Ratio measures the quality of your MRR growth. Coined by Mamoon Hamid
at Kleiner Perkins, it answers: for every dollar of MRR you lose, how many dollars
of new MRR are you generating?
Formula: Quick Ratio = (New MRR + Expansion MRR) / (Contraction + Churned MRR)
Benchmarks
> 4x: Exceptional — world-class growth quality
2–4x: Healthy — typical Series A/B requirement
1–2x: Marginal — growing but churn offsets most gains
< 1x: Declining
Why it matters
Two companies can have the same gross MRR growth but very different quick ratios.
A 30% gross growth rate with 25% churn has a Quick Ratio under 2x — the business
is on a treadmill. The same growth rate with 5% churn might be 6x — genuinely compounding.
Quick Ratio separates real growth from "replacing churn."
How to Improve Your SaaS Quick Ratio: 5 Proven Strategies
Improve your SaaS Quick Ratio by growing expansion MRR, reducing churn, and fixing the leakiest parts of your revenue funnel. Practical tactics with examples.
Your SaaS Quick Ratio improves when either the numerator grows (new + expansion MRR)
or the denominator shrinks (contraction + churned MRR). Here are five high-leverage tactics.
1. Build an expansion motion
Expansion MRR — upgrades, seat additions, usage overages — is the fastest way to
improve Quick Ratio. It requires zero CAC and compounds over time. Add usage-based
pricing, seat-based tiers, or feature add-ons customers buy after initial conversion.
2. Reduce logo churn with better onboarding
Most churn is decided in the first 30 days. Map your onboarding to the "aha moment"
— the point when customers first see value. Reduce time-to-value and you reduce churn.
3. Identify and fix your highest-churn segments
Not all customers churn equally. Segment by acquisition channel, company size, or
use case to find which cohorts churn 3× higher than average — then fix the fit,
expectation, or onboarding for that segment.
4. Move upmarket to reduce contraction
Smaller customers contraction-churn more often because budget decisions are ad hoc.
Mid-market and enterprise customers have annual contracts that structurally reduce
contraction MRR.
5. Launch a customer success program before churn happens
Proactive check-ins at 30/60/90 days catch at-risk customers before they cancel.
Even a lightweight CS process for your top decile by ARR significantly reduces
churned MRR.