Plain-language questions
Ask for burn multiple per month, customer or product in the SQL Explorer with AI. The AI writes the SQL, you see the query and run it yourself; the AI only receives metadata.
KPI · Subscriptions and SaaS
Burn multiple: formula and example.
Burn multiple is net cash burn in a period divided by net new ARR in the same period. It shows how much money a growing subscription business spends to add one extra euro of recurring revenue. The lower the burn multiple, the more efficient the growth.
Burn multiple formula
Net cash burn ÷ net new ARR
Worked example
In the third quarter, Acme's subscription service burns a net €300,000 of cash. Over the same quarter, ARR grows by a net €200,000. Burn multiple is €300,000 ÷ €200,000 = 1.5.
Fictitious figures for Acme Groothandel, a sample wholesaler.
How to read this KPI
A lower burn multiple means you need less money for every euro of growth. A rising burn multiple signals that growth is getting more expensive, for example through higher acquisition costs or more churn. Compare it quarter by quarter with your own history and read it alongside your cash runway: how many quarters can you sustain this pace? For a profitable company with no burn, the metric is not meaningful.
Pitfalls with burn multiple
- Including one-off outflows or inflows, such as a funding round or a large prepayment, in burn.
- Quarters with little or negative net new ARR produce extreme or negative values; show both components separately.
- Not separating out ARR growth that comes from price increases.
SQL & DAX
Calculating burn multiple in SQL and DAX
Two examples on a fictitious data warehouse for Acme Groothandel: a PostgreSQL query and a measure for a Power BI model. Adjust table and column names to your own model.
WITH burn AS (
SELECT date_trunc('quarter', month) AS quarter,
-SUM(operating_cash_flow - capex) AS net_burn
FROM cash_flows
GROUP BY 1
),
net_new AS (
SELECT date_trunc('quarter', month) AS quarter,
12 * SUM(CASE WHEN movement_type IN ('contraction', 'churn') THEN -amount ELSE amount END) AS net_new_arr
FROM mrr_movements
GROUP BY 1
)
SELECT b.quarter, b.net_burn, n.net_new_arr,
ROUND(b.net_burn / NULLIF(n.net_new_arr, 0), 2) AS burn_multiple
FROM burn b
JOIN net_new n ON n.quarter = b.quarter
ORDER BY b.quarter;Net Burn =
SUM(CashFlows[capex]) - SUM(CashFlows[operating_cash_flow])
Burn Multiple =
DIVIDE([Net Burn], [Net New MRR] * 12)In ENABLE
Tracking this KPI in ENABLE
In your Power BI dashboard
Define the KPI as a measure in your Power BI model and show it in the portal, with "Last refreshed" next to it. Access profiles and optional row-level security decide who sees which figures.
Custom dashboards (pilot)
Add the KPI as a tile to a custom dashboard, compared with last year. The Dashboard Builder is a pilot and can be switched on per client.
Monthly targets
With the built-in Targets app you set a target for the KPI per month, so you see actuals and target side by side.
FAQ
Frequently asked questions
How do you calculate burn multiple?
Divide net cash burn, the money you spend net of receipts, by net new ARR in the same period. With €400,000 of burn and €250,000 of net new ARR, burn multiple is 1.6. It is usually calculated per quarter.
What is net cash burn?
Net cash burn is the amount by which your cash falls in a period because of operations and investment: cash out minus cash in, excluding financing such as loans or new equity. It is operating cash flow minus capital expenditure, with the sign reversed. A company with positive free cash flow has no burn.
What is the difference between burn multiple and CAC payback?
CAC payback looks only at acquisition costs and the margin from new customers. Burn multiple looks at all company spending against total net ARR growth, including churn and expansion. That gives burn multiple a broader view of how efficiently a company grows.
Further reading
- KPI librarySaaS KPIs: MRR, churn and more explainedSubscription KPIs track recurring revenue: what comes in, what grows and what drops away. The data comes from your subscription or payment system and your CRM.Read more
- ResourcesHow to build a KPI dashboard: steps and examplesA KPI dashboard is an overview of the key figures you use to steer towards your goals, such as revenue, margin, on-time delivery or absenteeism. A good KPI dashboard does not start with the software, but with the decisions it needs to support. You then choose a limited number of KPIs, define them, sketch the dashboard and only then build it.Read more
- SolutionPower BI dashboard portal: share dashboards securelyShare your Power BI dashboards securely in your own portal, with role-based access.Read more
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