Why This Metric Could Be Less Important for Cloudflare Going Forward

Cloudflare (NYSE: NET) is a company on a mission. That mission: "to help build a better Internet." It does that by offering a full suite of solutions that help companies get information to their users as quickly as possible. In the age of digital connectedness, seconds matter!

With software-as-a-service (SaaS) businesses, one of the most popular metrics to measure a company's strength is dollar-based net retention. This metric takes the amount of revenue a company gets from customers in year one and compares it with how much the same cohort brings in during year two. By filtering out the effect of new customers, you get a better idea of how well a SaaS company holds onto and deepens relationships with existing customers.

But sometimes, it doesn't tell the whole story. In this segment of Motley Fool Live, recorded on Feb. 12, Fool contributors Brian Stoffel and Brian Withers discuss why remaining performance obligations -- or RPO -- are a better indicator of company health.

Source Fool.com