SaaS Metrics School

Common ARR Disclosure Mistakes And How to Avoid Them


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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
      •  

        ...more
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        SaaS Metrics SchoolBy Ben Murray

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