The Situation
ARR was the single most important number in the diligence package — and the most fragile. The buyer was going to test every contract: which renewed, which expanded, which were truly recurring, which had embedded non-recurring components. The original model didn’t expose the contract-level economics cleanly enough to survive that scrutiny.
Customer concentration was a separate diligence flag — top five customers represented over 60% of revenue. The buyer would want both the contracted recurring revenue and the customer retention math to hold up.
What CEI did
Built the ARR bridge from prior-year contracted recurring revenue forward, with line-item visibility into renewals, expansions, churn, and new logos — quantifying the components rather than presenting a single net number.
Tagged every contract in the data room with its recurring vs. non-recurring components, refresh obligations, and renewal mechanics so the buyer’s team could verify the recurring classification without re-litigating it.
Pre-built the answers to the customer concentration question: the contractual posture per top customer, the renewal track record, and the diversification trajectory.
Coordinated through the buyer Q&A tracker with sourced answers — turning what could have been three weeks of back-and-forth into a structured, fast diligence loop.
100%
Contracts Tagged & Indexed
< 2 Wks
Buyer Q&A Loop Closed
ARR Clean
Contracted Recurring Defensible
The buyer moved past revenue characterization quickly and engaged on the strategic questions that actually drive valuation — customer expansion potential, scalability of the platform, and product roadmap. The diligence loop stayed tight rather than dragging.
In Their Words
“Buyers don’t pay for the story you tell. They pay for the story you can prove. CEI made our story provable.”
— Founder & CEO | Confidential Client