SaaS Metrics School

How SaaS Companies Turn Usage Revenue into ARR


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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.”

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      SaaS Metrics SchoolBy Ben Murray

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