Annual Recurring Revenue per FTE

ARR per FTE measures the recurring revenue per employee, ie. the efficiency of a SaaS company.

ARR per FTE is calculated as your recurring revenue annually per full-time employee.

It indicates the efficiency in how your SaaS operates, and how much revenue each employee generates annually for the company. A high ARR/FTE number is attractive to investors and buyers, as it shows you can scale without adding employees - and it likely means you are highly profitable too.

Divide our total annual recurring revenue (ARR) by the number of full-time employees (FTEs).

For example, if you have $1M ARR and run on 4 people: Your ARR/FTE is $250K / employee.

According to Growth Unhinged and other analyses of real-life SaaS companies, these are some benchmarks for what to aim for in terms of OK, good, and great ARR per FTE.

Benchmarks for what OK, good, and great ARR per employee looks like - depending on company size

Note: don't optimize for ARR per FTE too early on! As it likely means you sacrifice growth. Rather, keep an eye on it and be more strict around it as a key KPI as your company matures.