9 Comments
Jun 7, 2023Liked by OnlyCFO

Interesting analysis. While it's incredibly difficult to place a monetary value on trust, the value is both very real and very large. Sooner or later, the tide always goes out and exposes the swimmers.

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I feel like we’re the only people taking this seriously 😂

Wall Street trust is hard to measure it when you have it... but certainly easy to see when you lose it

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author

Haha. It’s always takes a long time to earn that trust back too!

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Jun 7, 2023Liked by OnlyCFO

I have a good friend who works there, he is upset that none of the executives seem to be on the chopping block. Double dipping ARR...ouch

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Great post! Can you go into this section in a little more detail and how that math works?

A basic control that would have caught this would be to flag any significant changes (e.g. anything above 30% change) in ARR by customer. All of these errors would cause the ARR per customer to change >100% because it was double counting the base renewal amount.

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author

If you track ARR by customer you can review month over month changes in ARR —-specifically ARR changes that are large.

In this case, they were double counting the base ARR associated with the renewal when there was a simultaneous upsell. So the month over mo the change in ARR would have been >100%

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Got it. So, for example, if a customer was doing $10m in ARR, and they added an upsell of $5m (total ARR of $15m), SentinelOne was actually saying they added $15m of new ARR for an (incorrect) total of $25m in ARR and a change of 150% instead of the correct change of +50%?

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author

Yep

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Thanks! (Also yikes)

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