SaaS

Burn Multiple Calculator

Compare net burn to net new ARR to gauge how efficiently a company is converting cash burn into recurring revenue growth.

Last reviewed: April 30, 2026Free toolMethodology

Burn Multiple Calculator

These fields start with sample inputs. Keep them or replace them, then run the tool to show a fresh result.

Number fields accept plain values and common formatted input such as 250000, 250,000, or 1,234.56.

Result

Calculating the sample result.

Why it matters

Burn multiple became a widely used SaaS efficiency metric because it links growth to cash consumption more directly than topline growth alone.

When to use

  • Assessing growth efficiency during planning cycles
  • Benchmarking capital efficiency across quarters
  • Adding discipline to spend expansion decisions

Inputs & Outputs

Inputs

  • Net burn is the amount of cash consumed over the period.
  • Net new ARR is the increase in annual recurring run-rate over the same period.

Outputs

  • Burn multiple shows how many dollars of burn were used for each dollar of net new ARR.
  • ARR generated per burn dollar is the inverse view of the same relationship.

Burn multiple formula

Divide net burn by net new ARR. Lower results indicate more efficient growth for the same cash burn.

Burn multiple = net burn / net new ARR

Worked example

1

Efficiency snapshot

A SaaS company burned 3,600,000 and added 1,200,000 in net new ARR.

Inputs

  • Net burn: 3,600,000
  • Net new ARR: 1,200,000

Steps

  • Burn multiple = 3,600,000 / 1,200,000 = 3.0

Result

  • The burn multiple is 3.0x.

Edge cases & caveats

  • Very early-stage companies can show volatile multiples because ARR changes are lumpy.
  • The metric does not tell you whether the underlying growth is durable.

Frequently Asked Questions

Is a lower burn multiple better?

In general yes, because it means less burn is needed to create each dollar of net new ARR.

Can a company have strong growth and still a poor burn multiple?

Yes. If the company spends heavily to create that growth, the multiple can remain weak.

Keep going

Related Tools

saas

SaaS Magic Number Calculator

Estimate sales efficiency by comparing annualized new recurring revenue produced this quarter against the prior quarter's sales and marketing spend.

Open
saas

Rule of 40 Calculator

Add revenue growth rate and profit margin to check a common SaaS balance-of-growth benchmark.

Open
saas

Net Revenue Retention Calculator

Calculate how recurring revenue from an existing cohort changes after expansion, contraction, and churn.

Open