The SaaS Academy

I’ve built over 1,000 SaaS financial forecasts as an in-house CFO, as a fractional CFO, and now as someone who teaches this framework to finance teams around the world. And I can tell you with confidence: most SaaS companies are doing this wrong.

Not because they’re bad at finance. Because nobody ever showed them the right structure.

A SaaS financial forecast is not just a spreadsheet. It’s not a revenue guess with some expense lines below it. It’s a connected model built from four specific data sources, with revenue, headcount, department expenses, cash flow, and SaaS metrics forecasted in a deliberate sequence before you ever build your final P&L output.

This guide walks you through the five-step SaaS forecast model framework I use for every forecast I build. I’ll use a $7M ARR SaaS company as the running example so you can see how the math works.

Want the working Excel version? This article explains the framework. Inside the SaaS Forecast Model Course & Excel Template, I walk th...

If you’re new to SaaS metrics, it can feel like drinking from a fire hose.

ARR. MRR. NRR. CAC. LTV. Rule of 40.

Every investor, advisor, and operator seems to have a different opinion on what you should track. But here’s the truth: early-stage SaaS founders don’t need 50 metrics. They need the right 10. And depending on our stage, this could be just 3 SaaS metrics to begin with.

The goal is not to build the most complicated dashboard. The goal is to understand whether your SaaS or AI business is growing, retaining customers, generating healthy margins, and acquiring customers efficiently.

That’s why I organize SaaS metrics around my Five Pillar Framework:

1. Growth — Are you getting bigger?
2. Retention — Are you keeping what you’ve built?
3. Gross Margins — Is your core business model healthy?
4. Financial Profile — Are you balancing growth and profitability?
5. Efficiency — Are you acquiring customers economically?

In this guide, I’ll walk through the 10 SaaS metrics every beginning s...

Key takeaways

• Traditional SaaS gross margins of 70%+ are compressing towards 50% for AI-native businesses. Inference cost is variable. Every API call has a real, scaling cost.
• There are three P&L profiles: AI-Augmented, with a target margin of 80%; AI-Enabled, with target margins of 60% to 79%; and AI-Native, with target margins of 50% to 60%. Most SaaS companies today are AI-Augmented.
• AI costs often hide in hosting, software subscriptions, R&D, and infrastructure. If COGS is wrong, every downline metric is wrong.
• GitHub Copilot moving to usage-based billing on June 1, 2026 is the canary. Flat AI subscriptions are under pressure when heavy users consume disproportionately high amounts of compute.
• Four board questions are coming. This guide tells you how to be ready.

Your SaaS P&L was built for a world where COGS was mostly fixed in the short run. AI changed that.

For two decades, SaaS finance teams operated on a comfortable model: hosting and infrastructure scaled gradually...

Key takeaways

• AI measurement breaks into four layers: Consumption → Work → Outcomes → Business Impact. Each layer is harder to measure — and more meaningful — than the one below it.
• Tokens, seats, and DAUs sit below Layer 1. They're not business metrics. A CFO doesn't care that your AI processed 9 billion tokens last quarter. Yes, on the expense side, but we are beyond that now.
• Public tech companies setting the AI metrics framework: Salesforce's Agentic Work Unit, or AWU, is Layer 2; Intercom Fin's per-resolution pricing is Layer 3; ServiceNow's $100M internal savings claim is Layer 4.
• A blended gross margin of 95% can drop to 74% — and gross profit dollars can collapse 52% — while the percentage still looks "fine." Measuring at the wrong layer hides the damage.
• Three things to do this week: pull a clean AI cost report, fill in a work-unit definition, and build a one-page AI metrics summary.

AI agents are doing real work now. They resolve support tickets, update CRM records,...

Greetings All!

The SaaS Academy is open for enrollment due to the coronavirus.  With the economic uncertainty, it is time to button up your cash, SaaS metrics, and forecasting. 

I am very excited to have launched The SaaS Metrics Foundation.  Over 120 students have enrolled in the course.

The feedback has been great so far for the students who have enrolled.

Ease of signing up, clarity of presenting the material, and all around great value. The course covers key performance metrics that are unique to SaaS business models. It is complete with examples how to calculate and what to measure and track with the included excel templates. Super helpful in order to benchmark your company's performance to other SaaS industry leaders.

This is a learn at your own pace course designed to improve the financial transparency of your SaaS business through increased understanding of important SaaS metrics.  And there is a great mobile app so that you can learn from anywhere.

Check out my short...