SaaS Metrics School

Every Board, investor, and potential acquirer is asking the same question: How are AI initiatives driving revenue? In episode #315, Ben Murray shares insights from his research into public tech companies and how they’re defining and disclosing AI ARR (Annual Recurring Revenue). Using Verint as a case study, Ben explains how companies are leveraging AI-driven ARR, tying it to measurable outcomes, and communicating adoption in a way that resonates with both Wall Street and buyers. You’ll also hear how these disclosures may have supported Verint’s recent multibillion-dollar acquisition by Thoma Bravo. If you’re a SaaS or AI operator, this episode will help you define AI ARR, communicate adoption signals, and position your business model for higher valuation. What You’ll Learn What AI ARR is and how to calculate it. Why public companies like Verint are breaking out AI ARR from total ARR. The mechanics: how finance teams identify AI-influenced products and SKUs. Quantitative + qualitative adoption signals (e.g., number of users leveraging AI features). Why AI ARR disclosures matter for investor metrics and exit valuations. How Thoma Bravo’s acquisition of Verint shows the value of communicating AI initiatives. Why It Matters For SaaS & AI Leaders: Properly defining AI ARR helps show investors where new growth is coming from. For Finance Teams: Accurate reporting requires collaboration across accounting, product, and FP&A. For Investors: AI ARR signals measurable adoption and future revenue growth. For Valuation: Tying AI initiatives to financial outcomes increases credibility in fundraising and exit scenarios. Resources Mentioned Blog Post: How to Define AI ARR: https://www.thesaascfo.com/ai-arr-vs-saas-arr-how-to-define-and-calculate/ The SaaS Metrics Academy: https://www.thesaasacademy.com/ Quote from Ben “Don’t just say you’re building AI into your product — show investors how much ARR it’s driving and what outcomes it’s creating.”

Many usage-based companies like Twilio don’t disclose ARR as their North Star metric. So, what do they track instead to communicate growth and efficiency to investors? In episode #314, Ben Murray shares his research from 10-Q filings, press releases, and earnings calls to uncover the seven most common financial metrics that usage-based companies highlight. From revenue growth and gross margin improvements to AI adoption and RPO (Remaining Performance Obligations), you’ll learn what matters most to analysts, investors, and acquirers when ARR isn’t the headline. This is a must-listen if you’re building a usage-based business model and want to understand how to position your company for valuation and fundraising success. What You’ll Learn Why many usage-based companies don’t lead with ARR or MRR. The 7 key metrics How AI adoption is becoming a narrative driver in earnings calls. Why RPO is gaining importance as a measure of forward visibility and future revenue. Why It Matters For Investors: These metrics provide confidence in growth and scalability, even without ARR disclosures. For Founders: Tracking and segmenting these numbers helps communicate the right story to Boards and potential buyers. For Valuation: Metrics like RPO and NRR are increasingly driving company valuations in usage-based models. For Finance Leaders: Understanding which financial systems and SaaS metrics to track ensures more effective reporting and better alignment with investors.  Resources Mentioned The SaaS Metrics Academy: https://www.thesaasacademy.com/ Quote from Ben “If usage-based companies aren’t tracking ARR, what are they tracking? The answer is seven key metrics that investors want to see — from gross margin to RPO.”

There are hundreds of SaaS metrics, but which ones truly matter for SaaS leaders who want to scale, raise capital, and maximize company valuation? In episode #313, Ben Murray breaks down the five essential metrics every SaaS executive must understand — whether you’re a founder, CFO, or operator. From bookings to retention, gross profit, OpEx, and the ROSE efficiency metric, you’ll learn how to read your SaaS P&L like a top operator, and why these metrics are critical to driving durable growth, improving investor metrics, and strengthening your business model. What You’ll Learn Bookings – Signed contracts for ARR commitments, the fuel of your revenue engine. Retention – Gross revenue retention, net revenue retention, and customer retention are the ultimate health checks for recurring revenue. Margins (Gross Profit) – Why accurate COGS vs. OpEx separation matters for forecasting, profitability, and valuation. OpEx Profile – How much you should invest in R&D, sales, marketing, and G&A as a percentage of revenue. ROSE Metric (Return on SaaS Employees) – A powerful measure of organizational efficiency and path to profitability, stronger than revenue per FTE. Why These Metrics Matter Finance & Accounting: They form the backbone of your SaaS P&L and cash flow forecasting. Investor Metrics: Investors use these to evaluate efficiency, scalability, and risk. Valuation: Strong retention, margins, and efficiency drive higher SaaS valuations. Business Leaders: Understanding these numbers enables smarter decisions at both the departmental and company levels. Resources Mentioned Free Webinar – Deep dive into these five metrics, plus tips, frameworks, and pro insights: https://www.thesaasacademy.com/pl/2148701264 Quote from Ben “Every SaaS leader doesn’t need to calculate these metrics themselves — but they must understand them. These numbers tell the story of your business.”

Oracle’s stock recently jumped 37% — and the driver wasn’t just revenue growth or earnings per share. The market reacted to one SaaS metric: RPO (Remaining Performance Obligations), which surged 359% year-over-year. In episode #312, Ben Murray explains the RPO metric, how it’s calculated, and why investors are paying close attention to it. From Oracle’s $455B backlog to Snowflake’s disclosure practices, you’ll learn why this metric is becoming more important for both public and private SaaS companies. If you want to improve your investor metrics and maximize your company valuation, RPO should be on your radar. What You’ll Learn What RPO is (Remaining Performance Obligations) and how it’s calculated. Why RPO is a leading indicator of future revenue and business model stickiness. How Oracle’s massive RPO growth drove its stock surge. How public companies like Snowflake define and disclose RPO. Why private SaaS companies should start tracking RPO alongside ARR, MRR, and retention. How RPO supports investor confidence in fundraising and exit conversations. Why It Matters for SaaS Operators & Investors Investor metrics such as RPO create visibility into future revenue streams. RPO growth signals stronger customer commitment and drives higher valuations. Private SaaS companies can use RPO as a complement to retention metrics when preparing for fundraising. Resources Mentioned 📄 Blog Post: What is RPO? (Includes free template download): https://www.thesaascfo.com/understanding-remaining-performance-obligations-in-saas/ 🎓 SaaS Metrics Course – Learn how to calculate and present SaaS metrics that matter to investors: https://www.thesaasacademy.com/the-saas-metrics-foundation-course-community-phased Quote from Ben “RPO is a SaaS metric that gives investors visibility into the future. If Oracle can move its stock with RPO, you should consider tracking it too.” Disclaimer: This discussion is for informational and educational purposes only. Nothing in this episode should be taken as financial advice or a recommendation to buy, sell, or hold any stock, including Oracle. Always do your own research and consult with a licensed financial advisor before making investment decisions.

Your SaaS COGS (Cost of Goods Sold) is one of the most important foundations in your SaaS P&L — and getting it wrong can distort your gross profit margins, forecasts, SaaS metrics, investor metrics, and ultimately your valuation. In this episode, Ben Murray breaks down exactly what belongs in SaaS COGS, how to handle multi-hat employees, and why clean financial reporting is critical for scaling. If you’re a SaaS founder, CFO, or operator, episode #311 will help you properly structure your business model for accurate financial reporting and investor-ready transparency. What You’ll Learn Departments to include in COGS: Tech support, professional services, managed services, customer success (non-sales), DevOps, hardware, and transactional costs. Why COGS must be fully burdened (wages, taxes, benefits, bonuses, travel, etc.). How to handle allocations when employees wear multiple hats (without overcomplicating your accounting). The role of transactional cost centers for usage-based or variable revenue models. Why accurate COGS = accurate gross profit, margins by revenue stream, and valuation metrics. The importance of following the matching principle under accrual accounting. Why It Matters Finance & Accounting: Accurate COGS sets the foundation for reliable P&Ls and forecasts. Investor Metrics: Clean COGS helps investors and acquirers trust your financial systems and data. Valuation: Strong, transparent gross profit reporting increases confidence during fundraising or exit planning. Business Leaders: Knowing your true COGS drives better decision-making across your revenue streams.  Resources Mentioned Blog Post: How to Structure Your SaaS P&L Correctly: https://www.thesaascfo.com/what-should-be-included-in-saas-cogs/ Academy Content: Deep dive into SaaS COGS, OPEX, and financial modeling for SaaS and AI companies: https://www.thesaasacademy.com/the-saas-metrics-foundation Quote from Ben “Your SaaS COGS must be fully burdened — labor, taxes, benefits, even pizza parties. That’s how you get accurate gross profit and investor-ready financials.”

The SaaS Magic Number is one of the most Googled SaaS metric posts — but it’s also one of the most misunderstood. In episode #310, Ben Murray explains what the SaaS Magic Number really measures, why investors care about it, and the benchmarks you should use to evaluate your own business model. From the formula (revenue growth vs. sales & marketing spend) to the nuances (why churn and expansion impact the metric), Ben shows SaaS operators how to avoid common pitfalls. You’ll also hear the latest benchmark data from Ray Rike at Benchmarkit.ai, giving you investor-ready context for your next fundraising or valuation conversation. What You’ll Learn: What the SaaS Magic Number is and how to calculate it. Why it’s more than just a sales and marketing efficiency metric. The nuance: contraction, churn, and customer success also affect the number. Why ARR size and ACV segmentation are critical for accurate benchmarking. When the metric is most useful (short sales cycles, PLG) vs. when to be cautious (enterprise sales cycles). Why It Matters for SaaS Operators & Investors: The Magic Number is a widely used investor metric to gauge efficiency. Clean reporting builds confidence with investors and supports higher company valuations. Benchmarks by ARR and ACV provide a realistic picture of growth efficiency. Using the wrong interpretation can lead to bad decisions in finance strategy and fundraising. Resources Mentioned: Blog Post: https://www.thesaascfo.com/calculate-saas-magic-number/  Five-Pillar SaaS Metrics Framework: https://www.thesaasacademy.com/the-saas-metrics-foundation 🧾 Quote from Ben “Don’t just beat up sales and marketing when the magic number is low — churn, support, and customer success all play a role in this metric.”

When a strategic acquirer or private equity firm comes knocking, they’ll ask for more than your headline ARR number. In episode #309, Ben Murray shares the seven critical numbers that buyers want to see before moving forward with a deal. These SaaS metrics and investor metrics are not only central to due diligence but also directly impact your company's valuation. From ARR and contracted ARR to retention and RevRec policies, you’ll learn what to prepare now so you’re ready for the call — whether it’s tomorrow or two years from now. The point is to be prepared! What You’ll Learn: - The 7 metrics that this giant investment fund wants to see - Preparing your 4 key data sources - Don't wait; be prepared today   Why These Numbers Matter: - Fundraising & Exits: Acquirers use these metrics to assess risk, scalability, and long-term value. - Valuation Impact: Clean data on ARR, retention, and profitability drives higher multiples. - Investor Confidence: Reliable reporting reduces due diligence friction and builds trust. Don't fall prey to "deal fatigue!" Resources Mentioned: 🎓 SaaS Metrics Academy – https://www.thesaasacademy.com/the-saas-metrics-foundation-course-community-phased Quote from Ben “If a buyer calls you today, you need these seven numbers ready — clean, accurate, and tied to a strong finance foundation.”

When preparing for fundraising or an exit to private equity, one overlooked metric can derail your deal: customer concentration risk. In episode #308, Ben Murray explains what customer concentration is, why it matters to investors, and how it can directly impact your SaaS valuation. If too much of your revenue comes from just one or two customers, that risk may scare off private equity buyers or lower your valuation. Ben breaks down how to measure concentration, when it becomes a problem, and why you should start planning now — long before you enter a due diligence process.What You’ll Learn• What customer concentration is and how to calculate it.• Why concentration risk is a key investor metric in fundraising and exit planning.• How high concentration can lower a company's valuation.• The difference between strategic buyers and private equity when assessing risk.• Why SaaS operators must monitor revenue mix as part of long-term financial strategy.Why It Matters• Finance & fundraising impact: High concentration can reduce your chances of raising capital or exiting at a premium.• Valuation risk: Heavy reliance on a small number of customers lowers buyer confidence.• Investor confidence: PE firms and strategic buyers want diversified, predictable revenue streams.Resources MentionedSaaS Metrics for Investors – What Drives Valuation: https://www.thesaasacademy.com/the-saas-metrics-foundationQuote from Ben“If one customer makes up 25% of revenue, that’s a huge risk to a buyer — especially in private equity.”

The CAC payback period is one of the most important SaaS metrics — and a top investor metric used in boardrooms, fundraising, and valuation discussions. But here’s the nuance: which gross profit should you use when calculating it? In episode #307, Ben Murray explains why CAC payback must be gross margin adjusted and why using your company’s total blended gross margin is a mistake. Instead, you’ll learn how to align ARR, MRR, and revenue streams with their specific gross profit to get an accurate picture of sales efficiency and scalability. This lesson is especially critical for scaling SaaS and AI businesses as miscalculations here can distort your financial model, mislead investors, and even impact your company's valuation. What You’ll Learn Why CAC payback is a must-have metric in your financial dashboard. The correct gross profit to use in CAC payback calculations. How to calculate CAC payback when you have multiple revenue streams (subscription, usage, services, hardware). Why large SaaS companies may need segmented CAC payback periods for different products or business units. How an accurate accounting foundation prevents “accounting debt” that complicates metrics and valuation later. Why It Matters Investors rely on CAC payback to judge efficiency and growth potential. Using the wrong gross profit skews results and undermines trust in your financial metrics. Clean accounting systems and segmentation enable accurate benchmarking, which strengthens your story in fundraising and valuation discussions. Resources Mentioned 📄 Blog Post: How to calculate CAC payback the right way (with examples): https://www.thesaascfo.com/how-to-calculate-cac-payback-period-with-variable-revenue/ 🎓 SaaS Metrics Course: https://www.thesaasacademy.com/the-saas-metrics-foundation-course-community-phased Quote from Ben “You can’t just throw total company gross profit into CAC payback. It has to be tied directly to the revenue stream — otherwise the metric is meaningless.”

Is the AI funding boom overshadowing traditional SaaS? In episode #306, Ben Murray shares fresh fundraising data from over 8,000 tracked funding events to see how AI-native companies compare to pure-play SaaS in investor activity. Analyzing the first week of August, Ben breaks down the percentage of companies that are AI-first and how many SaaS products now include AI features or LLM integrations. If you’re a SaaS operator, founder, or investor, this is a quick pulse check on where capital is flowing — and what it might mean for your valuation and fundraising strategy. 🧠 What You’ll Learn Funding Breakdown – % of AI-native vs. pure-play SaaS companies receiving investment. Feature Adoption – The 50/50 split on companies adding AI or LLM features. Why the line between AI and SaaS is getting blurry in business models. How these trends might influence investor metrics, competitive positioning, and long-term company valuation. 📎 Resources Mentioned CAC Payback Period: https://www.thesaascfo.com/how-to-calculate-cac-payback-period-with-variable-revenue/ SaaS Metrics and Financial Management Course: https://www.thesaasacademy.com/the-saas-metrics-foundation-course-community-phased 🧾 Quote from Ben “The lines between SaaS and AI are blurring. A lot more AI is being embedded into pure-play SaaS products."

What SaaS metrics and financial metrics really matter when you’re scaling toward your first $1 million in ARR? In episode #305, Ben Murray breaks down the essential numbers to track using his Five Pillar SaaS Metrics Framework. From building a strong accounting foundation to tracking investor metrics like retention, bookings, and gross profit, this episode gives you the tools to set your business model up for scale and eventual company valuation growth. Whether you’re a founder, CFO, or finance lead, you’ll learn how to implement the right KPIs before you cross the $1M mark, so you can confidently present metrics to your team and/or investors and operate with clarity. What You’ll Learn: SaaSfy Your Accounting Foundation Why your accounting system (QBO, Xero, etc.) needs a SaaS-specific structure. How a clean P&L improves your ability to track revenue, margins, and KPI’s. Track Bookings Data Early Why executed contracts (new ARR, expansion ARR, and contraction) are one of the most important SaaS numbers. How bookings feed your go-to-market efficiency calculations and help measure sales ROI. Retention Is Key Gross revenue retention, net revenue retention, renewal rates, and logo retention — and when each matters most. How retention signals product-market fit and impacts valuation. Other Metrics to Watch Gross profit, EBITDA, cash flow forecasting, and cash runway. How do these connect to financial strategy and your long-term investor metrics? Why These Metrics Matter Before $1M ARR: Creates a financial systems foundation for scale. Equips you to benchmark your performance against peers. Builds a data story for fundraising and valuation discussions. Avoids costly gaps in financial modeling once growth accelerates. Resources Mentioned" 🎓 SaaS Metrics Foundation Course – next cohort starts October 7th.👉 Learn More: https://www.thesaasacademy.com/the-saas-metrics-foundation-course-community-phased 🧾 Quote from Ben “If you don’t have your accounting foundation and bookings data in place before $1M ARR, you’re setting yourself up for chaos as you scale.”

What SaaS metrics actually move the needle on your company valuation? In episode #304, Ben Murray shares his “Power 3” SaaS metrics — the three investor metrics that consistently signal scalable growth and increase SaaS valuations. While many articles list “top metrics” without context, these three have proven to be the most impactful in boardrooms, investor meetings, and due diligence. If you want to attract investors, strengthen your business model, and maximize your valuation, start by mastering these three metrics. What You’ll Learn: Gross Profit Why high gross profit (80%+ for pure-play SaaS) is a foundation for growth. How revenue mix and margins by stream impact scalability and valuation. Gross Revenue Retention (GRR) Why GRR is the ultimate measure of product stickiness. How poor retention erodes efficiency and drags on working capital. ROSE (Return on SaaS Employees) Ben’s proprietary alternative to “revenue per FTE.” Now updated to account for AI-driven roles that replace human labor. Why ROSE is more accurate for modern SaaS org efficiency.   Why These Metrics Matter for Investors & Valuation Investors look for predictable, efficient growth — these metrics show exactly that. High gross profit and retention indicate a sustainable business model. ROSE reveals operational efficiency that supports long-term profitability. Together, these KPIs create a clear narrative for maximizing company valuation.   Resources Mentioned: The Power 3 SaaS Metrics — Blog post + downloadable templates: https://www.thesaascfo.com/the-power-3-saas-metrics-that-predict-if-youll-scale-or-stall/ Quote from Ben: “If I could only choose three metrics to see if you’re scaling the right way, it would be gross profit, gross revenue retention, and ROSE.”

Accurate expense coding is critical to building a clean SaaS P&L that drives investor confidence, valuation discussions, and clarity in internal metrics. In episode #303, Ben Murray explains exactly where SaaS operators should code executive-level expenses (CMO, CRO, VP of Services, CFO, etc.) and why coding accuracy is a non-negotiable for both SaaS metrics and investor metrics. Ben also highlights the common mistake of letting G&A become a dumping ground, which can distort key financial metrics, including your gross profit margin, OpEx profile, and overall SaaS valuation. What You’ll Learn: Where to code executive salaries and expenses in your SaaS P&L Why department-level cost centers (Sales, Marketing, Services, etc.) are crucial for accurate SaaS metrics How misclassifying expenses can hurt your valuation and confuse investors during due diligence The golden rule: G&A should not be a dumping ground Tips on ensuring your bookkeeping process supports clean financial reporting Why It Matters for SaaS Operators & Investors: Accurate SaaS P&L structures are essential for clean reporting to boards and investors. Incorrect coding can skew key investor metrics like gross margin and operating expense ratios. A well-coded SaaS P&L provides the foundation to benchmark your business, manage spend, and maximize company valuation during fundraising or exit processes. Resources Mentioned: How to Properly Structure Your SaaS P&L (Blog Post + Example Template) Quote from Ben:“As a CFO, G&A isn’t a catch-all—it should only hold true G&A costs. Every expense needs to follow the people creating it.”

You’ve added new ARR—but are you spending too much to get it? In episode #302, Ben Murray walks through two practical ways to align your ARR growth with your sales and marketing spend. If you're unsure whether you're underinvesting, overspending, or just inefficient, this episode will help you benchmark your GTM motion using real data and operator-friendly metrics.  What You’ll Learn Two ways to triangulate S&M spend relative to ARR OpEx profile: Sales & Marketing spend as a % of revenue Cost of ARR: Spend required to acquire $1 of net new ARR Why relying on benchmarks without context (like ACV or price point) can mislead your analysis The difference between investment level and go-to-market efficiency Where to find benchmarks by ACV stage using Benchmarkit.ai (Ray Rike’s dataset) Why It Matters Your sales & marketing efficiency plays a critical role in sustainable SaaS growth Proper benchmarks help you avoid overspending—or underinvesting—in growth Helps investors and operators answer: “Is our GTM engine working?” Resources Mentioned Cost of ARR Blog Post + Template: https://www.thesaascfo.com/saas-cac-ratio/ Benchmark data: Benchmarkit.ai Quote from Ben “I love the Cost of ARR—because whether your ACV is $500 or $50,000, it normalizes efficiency across go-to-market models.”

Does your retention data feel off—or even meaningless—because of catch-up invoices, credit notes, or daily revenue recognition? In episode #301, Ben Murray explains how proper revenue recognition practices can sometimes interfere with clear retention reporting and what SaaS operators can do about it. Learn how to build a pro forma MRR schedule that strips out accounting noise and gives you clean, consistent retention metrics you can actually rely on. What You’ll Learn Why revenue recognition can distort retention metrics, even if your accounting is correct The difference between GAAP-based MRR and a pro forma MRR schedule How Ben built and used a pro forma model during a private equity exit process How to build your own pro forma MRR schedule using invoice data The critical role of invoice data as your source of truth Tools & Resources BackOfficeTools App: Upload your invoice data and generate retention metrics. Check out the tutorial here to learn more and sign up: https://www.thesaasacademy.com/offers/zz3ZR2WL Key Quote from Ben “We still follow proper revenue recognition, but when it comes to retention, sometimes we need a second view. A pro forma MRR schedule helps us cut through the noise.”

RPO—Remaining Performance Obligations—might not be a term you hear often in private SaaS, but public companies are required to disclose it, and it’s becoming a critical forward-looking metric. In episode #300, Ben Murray breaks down the RPO concept, how it's calculated, and why it matters in understanding your future revenue. Whether you’re preparing for due diligence or just want a stronger grip on your revenue story, understanding RPO can give you an edge. What You’ll Learn What “Remaining Performance Obligations (RPO)” means in SaaS How RPO connects to deferred revenue and unbilled contract amounts Why RPO is considered a forward-looking visibility metric Real-world RPO definition from Snowflake When RPO might apply to private SaaS companies — especially with multi-year deals Why It Matters A rising RPO often signals strong future revenue durability Adds context to your SaaS metrics Valuable in due diligence, PE conversations, and strategic exits Resources Mentioned Blog Post: Deep dive on RPO with real-world examples and use cases: https://www.thesaascfo.com/understanding-remaining-performance-obligations-in-saas/

How do usage-based SaaS companies convert transactional or variable revenue into Annual Recurring Revenue (ARR)? Episode #299 gives you a practical framework for presenting usage-based ARR to your Board, investors, and internal teams with clarity and confidence. After manually reviewing hundreds of public filings and investor materials, Ben Murray breaks down the real-world methods used by companies like Confluent and Datadog to turn usage into ARR. What You’ll Learn The most common method for usage-based ARR The second most common method How these methods compare to traditional MRR x 12 for subscription models Why ARR is often used as a North Star Metric and how transparency is improving across SaaS companies. Resources Mentioned Webinar Replay & Slide Deck (~59 slides): Get definitions, examples, and real ARR formulas from leading SaaS companies: https://www.thesaasacademy.com/offers/zz3ZR2WL Ben’s Research Process “Over 100 hours of manual research. I tried using AI—OpenAI couldn’t handle it. I had to read the filings myself. These ARR methods are backed by real-world data from public SaaS companies.”

In episode #298 of SaaS Metrics School, Ben Murray dives deep into one of his favorite metrics: ROSE – Return on SaaS Employees. If you’re aiming to build a durable SaaS business or position your company for a private equity exit, this episode is a must-listen. Ben explains why ROSE is far more insightful than traditional Revenue per FTE and how it helps evaluate organizational efficiency by factoring in the actual investment made in your people—including fully burdened employee and contractor costs. 🔍 What You'll Learn: What the ROSE metric is and how to calculate it Why ROSE is better than Revenue per FTE for SaaS businesses What a “good” ROSE looks like Real-world example of a SaaS company that exited to private equity How ROSE contributes to achieving the Rule of 40 Why you need to track and forecast ROSE monthly Call to Action! Grab my ROSE Metric template and the high-performance example here: https://www.thesaasacademy.com/pl/2148690725

In episode #297, Ben Murray tackles a common SaaS metrics question: How should reactivations be treated when calculating gross and net revenue retention (GRR & NRR)? Key takeaways: Reactivated customers (e.g., those who churned quickly but later update payment info) should not be included in new revenue — doing so skews CAC and CAC payback metrics. Gross Revenue Retention (GRR) only accounts for contraction and churn — reactivations don’t belong here. Net Revenue Retention (NRR) is where reactivations should be recorded — they’re essentially recovered revenue from existing customers. SaaS companies with high first-month churn (e.g., due to onboarding issues) may consider calculating an adjusted retention metric. Ben also highlights his new AI chatbot on TheSaaSCFO.com — trained on his blog content for instant SaaS finance answers. Level up your SaaS knowledge here: https://www.thesaasacademy.com/

Have you ever seen a public company restate its ARR? In episode #296, Ben Murray dives into a real-world example from the London Stock Exchange—Celebrus Technologies—and unpacks why and how they updated their Annual Recurring Revenue (ARR) definition. Key Highlights: Financial restatements ≠ just GAAP: ARR, a non-GAAP metric, is increasingly being scrutinized as pricing and revenue models evolve. Case Study: Celebrus Technologies Old ARR definition: Included license revenue, cloud, support & maintenance, third-party software licenses, and project revenue (i.e. services). New ARR definition: Focuses solely on Celebrus software licenses and managed services—excluding third-party licenses and project revenue. Why the change? To better align with how peers in their sector define ARR. To give investors a “cleaner” view of core recurring software revenue. Impact of the change: ARR restated downward and now reported at 18.8M (FY25). Ben’s take: This is a positive trend. While managed services are still debatable as “recurring,” overall transparency in ARR definitions is improving across public SaaS companies. Bonus Insight: ARR restatements, especially when they lower reported revenue, are rare—but this signals a maturing investor focus on true recurring revenue quality. Upcoming Webinar: Join Ben Murray and Ray Rike on July 17 as they explore how public SaaS companies are defining and calculating ARR. >> https://thesaascfo.webinarninja.com/live-webinars/10693368/register 🙏 If you found this episode valuable, please rate & review the show!