Seat-based versus usage pricing

Definition

Whether customers pay per person or per unit of what they consume, which sets how revenue moves.

Why It Matters

Seat-based revenue is predictable and shrinks in a layoff; usage revenue tracks the customer's own volume and can fall without anyone cancelling. The distinction decides how much of a forecast a lender should believe and how quickly a bad quarter reaches you. Read a full year of monthly revenue by account rather than the annual total, and ask which contracts carry minimums, because a minimum is the difference between a floor and a hope.