What is a revenue bridge?

A revenue bridge is a data visualization that breaks down the different components of a revenue forecast, making it easier to show the specific drivers behind top-line growth. Revenue bridge charts—sometimes called ARR bridge charts in the SaaS world—have been a go-to tool for helping finance teams present forecast data to both financial and non-financial stakeholders.

What does a revenue bridge chart show?

Like other bridge or waterfall charts, a revenue bridge shows a starting value, an ending value, and all the steps in between that explain how you got from A to B. These typically include: Starting ARR, New ARR, Renewal ARR, Upsells, Churned revenue, Downgrades, and Ending ARR. The goal is a clear visualization of the revenue journey from starting to ending ARR.

How to create a revenue bridge chart?

1. Build your data table with key components like baseline, increases, decreases, and delta. 2. Create a waterfall or stacked column chart using Excel or Google Sheets. 3. Customize formatting with data labels and color-coding to match presentation needs. This helps make the chart more effective for your audience.

Why spreadsheet-based bridge charts aren’t ideal for financial analysis?

Spreadsheets are static, require manual updates, and often lack context. They demand more effort and provide less clarity than modern financial tools designed for real-time analysis. They don’t allow for drill-down into details, quickly become outdated, and can introduce complexity and errors when embedded in larger models.

What is an ARR bridge?

An ARR bridge is a type of revenue waterfall chart that shows how starting ARR moves to an ending value. It breaks down the impact of new ARR, renewals, upsells, downgrades, and churn to give a clear picture of what’s driving changes in recurring revenue.

What does an EBITDA bridge show?

An EBITDA bridge illustrates how EBITDA changes from one period to the next. It accounts for shifts in recurring and non-recurring revenue, gross profit, and expenses across functions like sales, marketing, R&D, and G&A. This type of bridge is often used by more mature companies and financial analysts to better understand overall financial health.

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