Burn multiple calculator: cash used per unit of net new ARR

Version 1.0.0

The burn multiple compares the cash a SaaS business used in a period with the increase in its annual recurring revenue (ARR) run rate during that period. It is net cash burn ÷ net new ARR. Net cash burn is cash spent on operations minus cash collected from customers, excluding new funding. Net new ARR is ending ARR minus starting ARR; both ARR figures already describe a yearly rate.

Suppose the business used $2 million in cash during Q1 and its ARR rose by $1 million in that quarter. $2 million ÷ $1 million = 2×. During Q1, it used $2 in cash for every $1 its ARR run rate increased. Enter your period and both figures below to see the multiple or an explanation if one cannot be calculated.

Currency Required
Used for both amounts. Changing it changes their formatting without converting either amount.

Use net cash burn and the change in ARR from the same period.

Cash spent on operations minus cash collected from customers. Exclude funding and loan proceeds.
ARR is already an annualized run rate. Enter its change for this period.

How to use the calculator

  1. Choose one completed period, such as Q1 2026, and the currency used for both amounts. The currency choice labels your figures; it does not convert them.
  2. For net cash burn, use cash spent on operations minus cash collected from customers in that period. Exclude new equity funding and loan proceeds; IAS 7 classifies these as financing cash flows. Enter a negative amount if operations brought in more cash than they used. Total expenses and accounting loss are different figures.
  3. Enter net new ARR as ending ARR minus starting ARR for the same period. ARR is already a yearly run rate. For a quarter, use the quarter's actual cash burn and the difference between its opening and closing ARR. Don't multiply the quarter's burn by four or annualize the ARR change again.
  4. If you track monthly MRR instead, multiply that month's net new MRR by 12 to get net new ARR under the usual MRR to ARR convention. Use the same rule for what counts as recurring revenue at both ends of the month.

Enter amounts as digits without currency symbols or commas, with at most two decimal places. If a source figure is unknown, find it in your records instead of entering zero. Select Calculate burn multiple to see the result and the figures used. The calculator cannot check your cash or ARR records.

How to read the burn multiple

A result of 2.00× means the cash used in the selected period was twice the increase in the ARR run rate. It does not show that the spending caused the growth. A large payment or subscription change near a period boundary can shift the result. Compare periods using the same rules for cash burn and ARR.

If net cash burn is zero and ARR grew, 0.00× is a valid result. When a positive multiple would round to 0.00×, the calculator shows <0.01× so it cannot be mistaken for zero.

When no multiple appears

  • Cash generating means the net cash burn you entered was negative. The calculator shows this first, even if ARR stayed flat or declined. Check the ARR change beside the result.
  • Undefined means net new ARR was zero and cash burn was zero or positive. There is no growth amount to divide by, even if burn was also zero.
  • Unavailable means ARR declined and cash burn was zero or positive. A negative quotient would not tell you how much cash was used for growth.

Check the inputs before comparing periods

Check that cash burn and ARR change cover the same dates. Leave new equity funding and loan proceeds out of cash burn; if Cash generating appears after a funding round, check this input first. If your burn figure includes investment spending, such as equipment purchases, treat it the same way in each period. Keep the same rule for which subscriptions count in ARR.

A small positive ARR change can produce a very large multiple. For example, $12,000 of net cash burn ÷ $0.01 of net new ARR = 1,200,000.00×. The one-cent ARR change stays visible in the result. Check the source figures before drawing a conclusion from a number like this.

For a wider monthly view, use the SaaS metrics calculator. To see the monthly changes behind net new MRR, use the MRR waterfall calculator.