CAC payback period
The number of months it takes to recover the cost of acquiring a customer. Formula: CAC ÷ (monthly revenue per customer × gross margin %). A shorter payback means faster, more capital-efficient growth; under 12 months is often considered healthy for SaaS.
Burn multiple
Net cash burn divided by net new ARR over the same period. It answers "how much did we burn to add a dollar of new recurring revenue?" Lower is better: under 1x is excellent, 1–2x is good, above 3x signals inefficiency.
Runway
How many months a company can operate before running out of cash. Formula: current cash ÷ average monthly net burn. BaseFour calculates runway in real time.
Gross margin
Revenue minus cost of goods sold (COGS), as a percentage of revenue. It shows how much of each sales dollar remains after direct costs of delivering the product.
Contribution margin vs. gross margin
Contribution margin is revenue minus all variable costs for a product or channel, isolating the profit each incremental unit contributes before fixed costs. Gross margin only subtracts COGS. Contribution margin is the sharper tool for pricing and channel-mix decisions.
Variance analysis
Comparing actual results to budget or prior period and explaining the drivers behind each difference. Good variance analysis answers why, not just what—the job price-volume-mix analysis does for revenue.
MD&A (Management Discussion & Analysis)
The narrative section of a financial report where management explains results, trends and the reasons behind them. For many finance teams, hand-building the MD&A deck each month is the most time-consuming part of reporting.
Net revenue retention (NRR)
The percentage of recurring revenue retained from existing customers over a period, including expansion and net of churn/contraction. Above 100% means the existing base grows even without new customers.