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ARR bridge of a cloud security vendor in Bengaluru
The prompt
A cloud security software company in Bengaluru sells worldwide and reports in USD. It starts the year with USD 40 million of ARR (annual recurring revenue). It wins USD 12 million of new ARR, existing customers add USD 8 million by protecting more cloud accounts and buying new modules, and it loses USD 2 million to churn and downgrades. It spent USD 14.4 million on sales and marketing to win the new customers, and its gross margin is 80 percent. Calculate ending ARR, growth, net and gross revenue retention, and CAC payback. (Figures are illustrative.)
Your interviewer will share data as you ask for it. Ask clarifying questions, state a hypothesis, then lay out your structure out loud before you calculate.
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