Burn Multiple
Also: Net Burn Multiple
How much cash a company burns to generate each euro of new recurring revenue, a measure of growth efficiency.
Why it matters
The burn multiple captures capital efficiency in one number: how much you are burning relative to the new revenue you are adding. It became a key metric as efficient growth replaced growth-at-all-costs. A lower multiple means you are building revenue without torching cash.
How it is calculated
Burn Multiple = net cash burned in a period / net new ARR added in that period
What good looks like
Lower is better: a burn multiple under 1 is excellent, 1 to 2 is reasonable, and above 2 signals you are spending heavily for each unit of growth. The acceptable range tightens when capital is expensive.
Related terms
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