The biggest issue is not all ARR is the same. They spent $15m last year to grow incremental revenue by $7m, so you can't just add water and watch it grow, and this was in a low S&M year!
Now some of that $15m is used to maintain/retain customers and the LTV of a customer should extend more than one-year, so this this logic needs some caveats, but the point is they can't throw dollars at the problem to fix it. By way of comparison, a mature profitable company like MSFT spent $18b in S&M and grew revenue at $15.5b. You can't surmise their S&M payback period on these numbers but I'd suggest it is <2 years and in any event it is more than compensated by the growth in customer.
Thus the churn of small customers becomes important in determining whether LTV > CAC. It costs money to acquire a customer and letting them go has a serious impact on LTV. You can't use their numbers because the assumptions around LTV are not correct.
A better way is looking at CAC payback, for which you need to have a better understanding of churn and DBNER, which I haven't seen (admittedly I haven't looked hard).
So looking at the numbers, their revenue was up roughly 20% and the ARR per customer is up 18%, so I can only surmise that on a net basis they are growing ARR by getting more money from existing customers (and adding customers by replacing those that leave). Thus I can only surmise that their S&M spend is just keeping them above water and not materially adding value to the company. As a result they are extremely challenged - their marketing team needs to work out a way to lower CAC by increasing effectiveness, their SW team needs to improve retention. These are the only two ways to get LTV > CAC. Also, they need to get rid of the CFO because they are just not publishing the metrics that seasoned tech investors care about.
This is the reason why I don't own the stock; but at these low prices I'll keep a lookout to see if I can see signs of change.
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