# How To Calculate ARR by Cohort in Sage X3 | Arithmix

Learn how to calculate ARR (Annual Recurring Revenue) by cohort in Sage X3 with our step-by-step guide. Optimize your revenue forecasting and gain valuable insights into your customer base. Start improving your financial performance today.

Calculating ARR by cohort is a valuable tool for businesses looking to analyze customer behavior over time. By grouping customers into cohorts based on their sign-up date or first purchase date, businesses can track how their revenue changes over time for each group. This can help identify trends and patterns in customer behavior, which can inform future marketing and sales strategies.

## What Is ARR by Cohort?

ARR stands for Annual Recurring Revenue, which is the amount of revenue a business expects to receive from its customers on an annual basis. ARR by cohort refers to the calculation of this revenue on a cohort basis. In other words, it is the calculation of the expected annual revenue for a group of customers who all signed up or made their first purchase during the same time period.

For example, a business may group all customers who signed up in Q1 of 2020 into one cohort, and all customers who signed up in Q2 of 2020 into another cohort. By comparing the ARR for each cohort over time, the business can see how revenue is changing for each group and identify any trends or patterns.

## When Is It Valuable To Calculate ARR by Cohort?

Calculating ARR by cohort is valuable for businesses that want to understand how customer behavior changes over time. By grouping customers into cohorts based on their sign-up date or first purchase date, businesses can track how their revenue changes over time for each group. This can help identify trends and patterns in customer behavior, which can inform future marketing and sales strategies.

For example, if a business notices that the ARR for a particular cohort is decreasing over time, it may indicate that these customers are becoming less engaged with the product or service. This could prompt the business to investigate why this is happening and take steps to re-engage these customers.

Overall, calculating ARR by cohort is a valuable tool for businesses looking to analyze customer behavior over time. By grouping customers into cohorts based on their sign-up date or first purchase date, businesses can track how their revenue changes over time for each group and identify trends and patterns in customer behavior that can inform future marketing and sales strategies.

## How Do You Calculate ARR by Cohort in Sage X3

Sage X3 itself isn’t naturally geared towards letting you calculate complex metrics like ARR by Cohort. As an alternative, teams typically use products like Arithmix to import data from Sage X3 and build out dashboards.

## What is Arithmix?

Arithmix is the next generation spreadsheet - a collaborative, web-based platform for working with numbers that’s powerful yet easy to use. With Arithmix you can import data from systems like Sage X3, combine it with data from other systems, and create calculations like ARR by Cohort.

In Arithmix, data is organized into Tables and referenced by name, not by cell location like a spreadsheet, simplifying calculation creation. Data and calculations can be shared with others and re-used like building blocks, vastly streamlining analysis, model building, and reporting in a highly scalable and easy to maintain platform. Data can be edited, categorized (by dimensions) and freely pivoted. Calculations are automatically copied across a dimension - eliminating copy and paste of formulas.