Start from contract mechanics
Document term length, billing schedule, usage components, implementation work, cancellation rights, discounts, and renewal behavior. The same annual recurring revenue label can describe materially different commitments.
Separate recurring product value from services or pass-through revenue.
Read retention with its denominator
Gross retention measures what remains before expansion; net retention adds expansion. Both depend on cohort definition, currency treatment, acquisitions, and whether usage declines count as churn. Customer retention and dollar retention answer different questions.
Look for cohort behavior across multiple periods and segments.
- Opening cohort value
- Full churn
- Contraction
- Expansion
- Price change
- Ending cohort value
Relate growth to acquisition efficiency
Sales efficiency requires a consistent definition of acquisition cost and incremental gross profit. Capitalized commissions, long implementation cycles, partner costs, and rapid hiring can distort a simple ratio.
High growth can coexist with poor payback if customers are expensive to acquire or revenue is low margin.
Recalculate one retention or efficiency metric from disclosed components, document every denominator choice, and compare it with the company’s definition.