DANGERS OF ARR VS GAAP REVENUE

Summary from the TLDR Founders newsletter

There's "revenue" and then there's revenue - and they can be wildly different numbers. ARR is whatever companies want it to be, while GAAP revenue follows actual accounting rules. Example: a company showing 50% ARR growth might report 67% GAAP revenue growth - a 17-point gap. Why? GAAP lags because it recognizes money as delivered, not when signed. With AI scrambling pricing models, these gaps are getting dangerous. Less than 1/3 of public companies even disclose ARR anymore.