Compound Annual Growth Rate (CAGR)

The annualised value of recurring subscription revenue. ARR is the primary top-line metric for SaaS and subscription businesses, providing a normalised view of predictable revenue that strips out one-time fees and variable charges.

The rate used to convert a single-period earnings or cash flow figure into an indication of value, calculated as the discount rate minus the expected long-term sustainable growth rate. The capitalisation rate is the reciprocal of the capitalisation multiple and is used in the capitalisation of earnings method for businesses with stable, predictable income streams.

A dividend discount model that values a perpetual stream of cash flows growing at a constant rate, calculated as the next period's cash flow divided by the difference between the discount rate and the growth rate. The Gordon growth model is widely used to estimate terminal value in discounted cash flow analyses and requires that the assumed growth rate remains below the discount rate.

The percentage increase in a company's revenue over a specific period, typically measured year-over-year or quarter-over-quarter. Revenue growth rate is a fundamental measure of business expansion, market traction, and the effectiveness of go-to-market strategy.

The process of projecting a company's future growth trajectory based on historical data, market conditions, and investment patterns. Incorporating intangible asset data and productivity trends significantly improves forecast accuracy and reduces investor uncertainty.

A go-to-market strategy where the product itself serves as the primary driver of customer acquisition, conversion, and expansion, rather than traditional sales-led approaches. PLG companies offer free trials, freemium tiers, or self-service onboarding that allows users to experience value before engaging with sales teams.

The number of months a company can continue operating at its current burn rate before running out of cash. Runway is calculated as current cash balance divided by monthly burn rate and is the most critical survival metric for pre-profit businesses.

The percentage change in a metric from one year to the next, used to assess trends while neutralising seasonal effects. YoY growth rates in revenue, productivity, and intangible asset investment are fundamental to performance evaluation, valuation modelling, and growth accounting analysis.

How is the Rule of 40 calculated and when does it apply?

The Rule of 40 states that a healthy SaaS company's revenue growth rate plus profit margin should exceed 40% — it applies primarily to SaaS companies at scale and is used by investors to assess growth-profitability balance.

What is the Multi-Period Excess Earnings Method (MPEEM)?

MPEEM isolates the earnings attributable to a single intangible asset by deducting charges for all other contributory assets from total earnings, then discounting the residual cash flows to present value.

What is an intangible asset valuation report?

An intangible asset valuation report provides a formal, documented assessment of the fair value of a company's intangible assets using recognised valuation methodologies.