I used to work for a private tech company (not in finance) but had a view into the revenue we were doing and was constantly confused by the aggregate ARR number.
This seems to happen not just with ARR but a whole bunch of metrics used to prove ROI or value of a company. And that's before we get into the craziness of WeWork, Enron, and a bunch of other orgs over the years.
I think just knowing how to do basic research on a balance sheet is such a key skill to have.
Hey Pawan, not necessarily as you may have additional contracts that went live in the last month of the quarter, therefore the MRR of the last month would be higher than the first two months and MRR*12 would be higher than the quarterly *4.
CJ, thoughts on how we could deal with transactional revenue? An example of this is a client pays me x$ based on the times it uses a service.
Sure I think you have to look at business day count adjusted revenue per day and then normalize it for the month and then multiply by 12
I used to work for a private tech company (not in finance) but had a view into the revenue we were doing and was constantly confused by the aggregate ARR number.
This seems to happen not just with ARR but a whole bunch of metrics used to prove ROI or value of a company. And that's before we get into the craziness of WeWork, Enron, and a bunch of other orgs over the years.
I think just knowing how to do basic research on a balance sheet is such a key skill to have.
I never thought about the definition. This is so interesting. Wouldn’t those doing quarterly * 4 be the same as MRR * 12? 🤔
Hey Pawan, not necessarily as you may have additional contracts that went live in the last month of the quarter, therefore the MRR of the last month would be higher than the first two months and MRR*12 would be higher than the quarterly *4.