Avalara Analyst Day Virtual
Financial
Definitions
CORE CUSTOMERS
We believe our core customer count is a key indicator of our market penetration, growth, and
potential future revenue. We use core customers as a metric to focus our customer count reporting
on our primary target market segment. We define a core customer as:
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a unique account identifier in our primary U.S. billing systems (multiple companies or divisions
within a single consolidated enterprise that each have a separate unique account identifier are
each treated as separate customers);
that is active as of the measurement date; and
for which we have recognized, as of the measurement date, greater than $3,000 in total
revenue during the previous 12 months.
Currently, our core customer count includes only customers with unique account identifiers in
our primary U.S. billing systems and does not include customers that subscribe to our solutions
through our international subsidiaries and certain legacy and acquired billing systems that have
not yet been integrated into our primary U.S. billing systems (e.g., recent acquisitions and our
lodging tax compliance solution). As we increase our international operations and sales in
future periods, we may add customers billed from our international subsidiaries to the core
customer metric.
We also have a substantial number of customers of various sizes that do not meet the revenue
threshold to be considered a core customer. Many of these customers are in the emerging and small
business segment of the marketplace, which represents strategic value and a growth opportunity
for us. Customers who do not meet the revenue threshold to be considered a core customer provide
us with market share and awareness, and we anticipate that some may grow into core customers.
In addition, we have numerous enterprise-level customers that only utilize our services for small
segments of their business, providing opportunities over time for us to extend our relationship and
make them core customers.
In addition to customers with whom we have a direct relationship, some of our customers are
business application publishers (including ecommerce platforms) that include automated tax
determination powered by Avalara. While those platform providers may be core customers to
Avalara, their end-user customers generally are not.
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