GTM Glossary · Metrics
SaaS Quick Ratio
New plus expansion recurring revenue divided by churned plus contracted recurring revenue in the same period.
[01]What It Means
It measures whether growth is outrunning decay right now, rather than a year later. Below 1.0 the business is shrinking regardless of how the acquisition numbers look; 1.0 to 2.0 is fragile; above 4.0 indicates momentum that survives a bad quarter.
[02]Why It Matters
Net retention is a lagging measure that expansion can disguise for a long time. The quick ratio surfaces a leaky base early, which in a new market usually means the ICP is wrong rather than the product.
[03]Where It Goes Wrong
Reading it monthly on annual contracts, where the denominator barely moves.Counting reactivated customers as new revenue.Ignoring contraction because the logo was retained.
[04]Related Terms
[05]Where We Apply This