Calculating DBNRR and %Recurring Revenue

Hi All,
I am new to MF and this board, I am trying to understand some of the numbers that others post on the board while discussing high growth SaaS stocks. I am not sure how to calculate the below metrics, could any of you please help me out here ?

I apologize if this post is not appropriate for this board.

  1. How to calculate Dollar Based Retention Rate ?
    On the web I see formula for customer retention rate but not dollar based retention rate.

  2. How to calculate recurring revenue from the earnings financials ?

Thank You.

2 Likes

How to calculate recurring revenue from the earnings financials?

We usually consider all of subscription revenue as recurring, as that is what a subscription means.

How to calculate Dollar Based Retention Rate?

For the most part, companies on subscription usually spend more the following year with our companies, either because of more people or departments in the customer company using our software, or because the customer company starts to use more modules of our software. If all the customers that were spending last year, combined, spend 23% more, the Dollar Based Retention Rate is 123%. The only way to get it is from our company’s earning report, or conference call, or presentation.

Welcome to the board,

Saul

31 Likes

I am trying to understand some of the numbers that others post on the board while discussing high growth SaaS stocks

I suspect further discussion should happen offline but for reference allow me to share this helpful Twitter thread by Ryan Reeves (of Investing City) where he explains the following:

  • Bookings
  • Billings
  • Revenue
  • ARR
  • DBNER
  • DBGRR
  • DBNRR
  • Deferred Revenue
  • RPO

https://twitter.com/investing_city/status/129685881526293708…

9 Likes

Thank you Saul and trendgetter.