← Back to Blog

SaaS Metrics That Matter for Technical Due Diligence

SaaS financial metrics like ARR and churn tell part of the story. Technical metrics reveal whether the platform can sustain growth and profitability.

Infrastructure Metrics

Cost Efficiency

  • Infrastructure cost per customer: Should decrease with scale
  • Gross margin by cohort: Should improve over time
  • Cloud spend as % of revenue: Typically 15-25% for healthy SaaS

Scalability Indicators

  • Cost scaling ratio: Infrastructure cost growth vs. revenue growth
  • Capacity headroom: Current load vs. maximum capacity
  • Auto-scaling effectiveness: Response to demand spikes

Reliability Metrics

  • Uptime/Availability: Target 99.9%+ for enterprise SaaS
  • Incident frequency: Trend over time
  • Mean time to recovery: Speed of incident resolution
  • SLA compliance rate: Meeting customer commitments

Development Metrics

  • Deployment frequency: Release cadence
  • Lead time: Idea to production timeline
  • Bug escape rate: Issues reaching production
  • Technical debt ratio: Remediation time vs. development time

Customer Experience Metrics

  • Page load times: User experience indicator
  • API response times: Integration partner experience
  • Error rates: User-facing failures
  • Support ticket correlation: Technical issues driving support
Key Takeaway: Strong financial metrics with poor technical metrics suggest unsustainable growth. The technology foundation must support the business trajectory.

Continue Reading

Ready for Your Technical Due Diligence?

We've assessed 100+ M&A transactions worth $10B+. Let's discuss how we can help with your deal.