Plain definitions, with what porchops specifically means by each one. Twelve Revenue-heavy terms at launch; more ship in the first 30 days post-launch.
ARPU (Average Revenue Per User) is total MRR divided by active customer count. A foundational SaaS unit metric — tracks pricing power, customer mix, and expansion success over time. Healthy SaaS at $5K-$500K ARR runs ARPU between $20 (B2C SaaS) and $500 (mid-market B2B SaaS).
Churn is the customer who cancels their subscription. Two types: voluntary (customer chose to leave) and involuntary (payment failed and wasn't recovered). Together they reduce MRR. Healthy SaaS at our scale runs 2-5% monthly customer churn; runaway churn above 7-10% is a product-market-fit signal.
A decline code is Stripe's classification of why a payment failed. There are roughly 30 codes covering everything from card_declined (generic) to insufficient_funds (soft) to fraud_suspected (hard) to expired_card (most-recoverable). Decline codes drive both retry strategy and recovery email copy.
Dunning is the communication cadence a vendor uses to recover an unpaid invoice. In SaaS, it usually means the email-and-retry sequence that fires when a customer's recurring payment fails — Stripe retries the card, the vendor emails the customer, and the goal is to recover the payment without losing the relationship.
Expansion revenue is growth from existing customers — seat additions, tier upgrades, usage growth, cross-sell. Healthy SaaS targets 10-30% of new MRR coming from expansion (not new acquisition). Cleo on porchops watches for the signals; the founder decides which to act on.
Failed payment recovery is the operational practice of getting a customer's payment to succeed after it fails. Includes the technical retry layer (Stripe Smart Retries), the email/communication layer, and the audit trail of who paid late and why. Most SaaS at $5K-$500K ARR loses 5-10% of MRR monthly to failed payments.
A hard decline is a payment failure suggesting a non-recoverable issue — card closed, fraud suspected, lost or stolen card. The card itself is invalid; retries won't help. The customer must update their payment method or the subscription ends. Recovers at ~15% on average; the recovery is the customer manually updating, not the email itself.
Involuntary churn is cancellation caused by a payment failure that wasn't recovered. The customer still wants to be a customer; they just couldn't pay. Across $5K-$500K ARR SaaS, involuntary churn typically runs 30-50% of total churn — the share that's recoverable with operational discipline.
MRR (Monthly Recurring Revenue) is the sum of monthly subscription value across all active customers, normalized to a monthly basis. Annual subscriptions divide by 12; quarterly by 3. The foundation metric for SaaS finances; tracks growth, churn, expansion, and contraction over time.
Stripe Smart Retries is Stripe's intelligent retry logic for failed payments. It reads decline codes, applies network-data-driven retry cadences (immediate, 24-hour, 72-hour, 7-day), and retries failed cards at the times most likely to succeed. Free with Stripe; significantly outperforms hand-tuned retry logic.
A soft decline is a payment failure suggesting a temporary issue — insufficient funds, do_not_honor, processor temporarily down. The card itself is valid and the customer still wants to pay; the payment can typically be recovered via Stripe's retry plus a friendly email a few hours later. Recovers at ~50% on average.
Voluntary churn is cancellation by customer choice — they still could pay, but they don't want to anymore. Indicates product-market-fit issues, support failures, lifecycle end (project finished, business closed), or competitive displacement. Usually 50-70% of total churn at $5K-$500K ARR SaaS.