CARR, ARR, and the Impact of Usage-Based Pricing
Episode description
Contracted Annual Recurring Revenue (CARR) and Annual Recurring Revenue (ARR) are commonly used terms in the SaaS and Cloud Industry but are not standardized leading to inconsistent calculation. In fact, they were the first two metrics the SaaS Metrics Standards Board published standards upon.
Dave and Ray discuss the current definitions, calculations and how Usage-Based Pricing is impacting the historic ARR reporting model.
During today's episode CAC and Growth cover the following topics:
- Contracted Annual Recurring Revenue (CARR) - Definition and Calculation
- Annual Recurring Revenue (ARR) - Definition and Calculation
- Usage-Based Pricing and impact on revenue reporting
- Introduction of Recurring and Re-ocurring revenue
- Reporting variable revenue from Usage-Based Pricing models
With ARR not being a FASB / GAAP Revenue reporting standard - the opportunity and challenges for having multiple calculation and reporting models is easy to identify - but hard to rectify.
If you are using, considering using or do not use Usage-Based Pricing this conversation and episode is a great listen.
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