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Table Table 3 Growth that compounds

Three-Year Financial and Unit Economic Trajectory

Performance MetricYear 0 (Broken Baseline)Year 1 (Stabilization)Year 2 (Efficiency)Year 3 (Scaled Excellence)
Total Enterprise Customers400440520680
Average Contract Value (ACV)\$30,000\$34,000\$38,000\$42,000
Annual Recurring Revenue (ARR)\$12,000,000\$14,960,000\$19,760,000\$28,560,000
Monthly ARPU per Customer\$2,500\$2,833\$3,167\$3,500
Direct Monthly Cost to Serve (CTS)\$1,350\$950\$680\$550
Unit Contribution Margin %46.0%66.5%78.5%84.3%
Monthly Contribution Cash per Account\$1,150\$1,883\$2,487\$2,950
Fully Loaded CAC per Customer\$38,000\$32,000\$27,500\$24,500
Contribution CAC Payback Horizon33.0 months17.0 months11.1 months8.3 months
Annual Customer Retention Rate ($r$)78.0%85.0%90.0%92.5%
Implied Average Customer Lifespan3.2 years4.8 years7.2 years10.5 years
5-Year Discounted Contribution LTV\$34,800\$68,500\$108,200\$139,800
LTV:CAC Ratio (Contribution Basis)0.57x (Insolvent)2.14x3.93x5.71x (World-Class)
Operating Cash Flow (Burn / Profit)-\$7,500,000-\$1,800,000+\$2,400,000+\$8,200,000
Implied ARR Valuation Multiple4.0x6.0x8.0x10.5x
Enterprise Valuation\$48,000,000\$89,760,000\$158,080,000\$299,880,000

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Reference & Evidence

Source: Table from this essay. Sources and interpretation are given in the article.