In episode #347 of SaaS Metrics School, Ben Murray explores the lesser-discussed nuances behind ARR (Annual Recurring Revenue) disclosures. Building on the prior two episodes on ARR definitions and common disclosure mistakes, this discussion dives into the assumptions and gray areas that often underlie headline ARR numbers.

Drawing on extensive research across public tech company filings, Ben explains how assumptions about renewals, timing, and grace periods can materially affect how ARR is interpreted by boards, investors, and acquirers.

Resources Mentioned

• Blog post: In-depth analysis of ARR definitions and disclosure practices: https://www.thesaascfo.com/cfos-guide-to-disclosing-headline-arr-numbers/
• SaaS Metrics course: https://www.thesaasacademy.com/the-saas-metrics-foundation

What You’ll Learn

• Why most ARR definitions assume full renewal of existing contracts
• How ARR disclosures typically avoid assumptions around expansion, contraction, or churn
• Why ARR is almost always a point-in-time metric rather than a forecast
• Common disclaimers used to separate ARR from GAAP revenue and financial guidance
• How grace periods for contract renewals can materially affect reported ARR—and how some public companies quantify that risk

Why It Matters

• ARR assumptions directly influence how investors assess revenue durability
• Poorly explained ARR nuances can create confusion during due diligence
• Grace periods can inflate perceived recurring revenue if not disclosed properly
• Transparent ARR disclosures strengthen credibility with boards and potential buyers
• A defensible ARR definition supports better financial strategy and valuation discussions

In episode #346 of SaaS Metrics School, Ben Murray breaks down the most common mistakes SaaS and AI companies make when disclosing their ARR (Annual Recurring Revenue). Building on the prior episode about the five questions every ARR definition must answer, this discussion focuses on where ARR disclosures go wrong—and why unclear definitions can damage credibility with investors, boards, and acquirers.

Drawing from extensive research on public tech company filings and press releases, Ben explains how vague ARR definitions, hidden mechanics, and inconsistent methodologies create confusion and risk during fundraising, valuation discussions, and due diligence.

Resources Mentioned

• Prior episode: The 5 Questions Your ARR Definition Must Answer
• SaaS Metrics Course: https://www.thesaasacademy.com/the-saas-metrics-foundation
• Blog post on ARR: https://www.thesaascfo.com/cfos-guide-to-disclosing-headline-arr-number

What You’ll Learn

• Why a company’s pricing model does not always match its ARR model
• The importance of clearly defining which revenue streams are included in ARR
• Common issues with vague annualization periods (monthly vs. quarterly vs. trailing periods)
• How poor disclosure of usage-based or variable revenue creates misleading ARR numbers
• Why ARR definition changes and restatements require clear explanation and transparency

Why It Matters

• Clear ARR disclosure builds trust with investors, boards, and business leaders
• Poorly defined ARR can undermine company valuation and fundraising conversations
• Inconsistent ARR definitions make benchmarking and financial modeling unreliable
• Transparent ARR mechanics reduce follow-up questions during due diligence
• Strong financial strategy starts with defensible, repeatable revenue metrics

Defining ARR is getting harder—not easier—as SaaS, AI, usage-based pricing, and hybrid business models evolve. In episode #345 of SaaS Metrics School, Ben Murray breaks down the five critical questions every ARR definition must answer to hold up with Boards, investors, and during due diligence.

Drawing on extensive research into how public tech companies disclose ARR in press releases and SEC filings, Ben explains why ARR is not “dead” but why vague or inconsistent ARR definitions undermine credibility, comparability, and company valuation. This episode provides a practical framework to help SaaS leaders, CFOs, and founders clearly define ARR in a way that supports accurate metrics, financial modeling, and investor trust.

Resources Mentioned

• Blog post on ARR definitions and disclosure best practices: https://www.thesaascfo.com/cfos-guide-to-disclosing-headline-arr-numbers/
• Ben's SaaS Metrics training: https://www.thesaasacademy.com/the-saas-metrics-foundation

You’ll Learn

• The five questions every ARR definition must answer to be investor-ready
• Which revenue types belong in ARR—and which should be excluded
• The difference between revenue-based, contract-based, and hybrid ARR calculations
• How public SaaS and AI companies annualize subscription and usage-based revenue
• Common approaches for handling variable, consumption, and usage revenue in ARR
• Why vague ARR definitions create confusion in fundraising and due diligence

Why It Matters

• Clear ARR definitions improve credibility with investors and business leaders
• Poorly defined ARR can negatively impact company valuation
• Consistent ARR logic enables better KPI tracking and benchmarking
• Transparent ARR disclosures reduce friction during fundraising and M&A
• Accurate ARR supports stronger financial strategy and forecasting
• Well-defined revenue categories improve accounting and financial systems