Estimating Change in Deferred Revenue
Hey guys - does anyone have guidance on estimating change in deferred revenue without building a full waterfall? thanks in advance
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Your change in deferred revenue will generally scale with change in recurring revenue (ARR), so you can triangulate accordingly (assuming comparable billing terms and deal/implementation seasonality).
To OP, definitely make sure you know how contracts will look going forward vs. how they've looked historically
Thank you both. Assuming no change to contract terms, what would be a simplifying assumption that you would make? That change in deferred revenue = change in ARR on a percentage basis?
for context, I'm trying to put together a simple LBO where i can flex ARR growth myself and estimate change in deferred (mgmt case has ARR growth 50%+ and change in deferred is nearly $100M in the forecast period). thank you in advance
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