New ARR and CAC in Price-Ramped vs. Auto-Expanding Deals
Kellblog
AUGUST 7, 2019
Say you sign a three-year deal with a customer that ramps in payment structure: year 1 costs $1M, year 2 costs $2M, and year 3 costs $3M. Let’s say in this example the customer is getting the exact same value in all 3 years (e.g., Payment structure. $1M. GAAP revenue. $1M. GAAP unbilled deferred revenue. $5M.
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