Two SaaS companies with identical underlying performance can show wildly different headline metrics depending on which definition they use. This becomes a real problem when a UK-headquartered company starts pitching US growth investors — the numbers look familiar, but the methodology is subtly different and the partner notices immediately.
ARR
US convention: contracted ARR at period end, including signed-but-not-yet-live customers if the contract is non-cancellable. UK convention: more conservative — live, billing ARR only. The US definition will typically run 5–15% higher for the same business.
Net Revenue Retention (NRR)
- US: opening cohort ARR plus expansion minus contraction minus churn, divided by opening ARR. Reported by quarterly cohort.
- UK: often blended across all customers — masks recent cohort weakness.
- Best practice for fundraising: report both, and show NRR by cohort heat map.
Gross Revenue Retention (GRR)
Opening ARR minus contraction minus churn, divided by opening ARR. Caps at 100%. US Series B+ investors increasingly want GRR above 90% for vertical SaaS, 85%+ for SMB SaaS.
CAC Payback
Fully-loaded sales and marketing spend (including allocated salaries, commissions, and marketing tooling) in the prior period, divided by new ARR added times gross margin. Expressed in months. Top-quartile US SaaS hits 12–18 months at Series A, 18–24 months at Series B.
Rule of 40
Growth rate plus FCF margin. US growth investors increasingly want this broken into its components — a 40 made up of 60% growth at -20% margin reads very differently from 20% growth at +20% margin.
The translation table
When CloudFin Labs prepares a transatlantic fundraising model, we ship both methodologies side-by-side with a one-page bridge document explaining every difference. It pre-empts the diligence question and signals operating maturity to the room.