“The highest month of people turning off auto-renew in an annual subscription is actually the first month, and so you can get pretty predictive of what revenue is actually going to recur if you know that first month of people turning it off and then fit the curve.”

Reported ARR is really AR — first-month autorenew-off is the cliff

Dashboard ARR numbers overstate reality because consumer annual plans see most cancellations in month one, and median annual retention is around 35%. To get a true MRR/ARR, discount reported recurring revenue by the first-month autorenew-off rate (or by known cohort retention) before pitching a multiple to anyone — buyers will quietly recompute this.