Start free →

Glossary of financial terms

Updated July 18, 2026

Every metric in Adlega is defined in plain English below. For a deeper dive on any of these, our blog has a full guide per term.

Revenue and growth

  • MRR (Monthly Recurring Revenue) — the predictable subscription revenue you earn each month. More →
  • ARR (Annual Recurring Revenue) — MRR × 12; the annualized run-rate.
  • Expansion revenue — extra revenue from existing customers upgrading or buying add-ons.
  • Bookings — the total contract value a customer commits to, which may differ from what is recognized as revenue each month.
  • ARPA — average revenue per account.

Retention

  • Churn — the rate at which customers (or the revenue they represent) leave. More →
  • NRR (Net Revenue Retention) — revenue retained from existing customers including expansion, net of churn. More →

Unit economics

  • CAC (Customer Acquisition Cost) — what it costs, on average, to acquire one customer. More →
  • LTV (Lifetime Value) — the total gross profit you expect from a customer over their lifetime.
  • LTV:CAC — the ratio of lifetime value to acquisition cost; 3:1 is a common healthy target.
  • CAC payback — how many months of margin it takes to recover the cost of acquiring a customer. More →

Profit and loss

  • COGS — cost of goods sold; the direct cost of delivering your service (hosting, payment fees, support).
  • Gross profit / gross margin — revenue minus COGS, in dollars and as a percentage.
  • OPEX — operating expenses, split into R&D, S&M and G&A.
  • EBITDA — earnings before interest, tax, depreciation and amortization.
  • Net income — the bottom line after all costs, interest and tax.

Cash

  • Burn rate — how much cash you consume each month. Gross burn is total spend; net burn is spend minus revenue.
  • Runway — how many months of cash you have left at your current net burn. More →

Fundraising

  • Valuation — what your company is worth; Adlega estimates it with the VC method (exit value discounted back to today).
  • Dilution — the percentage of ownership founders give up when they raise.

Don’t see a term? Search the Adlega blog — it has a full glossary of SaaS finance concepts.