The annuity engine — recurring contracts, renewals at risk, and service-quality SLAs across the monitored base.
$2M of the $14M renewal wall is flagged at-risk against a $24M recurring base retaining at 91.8% NRR. Defend the at-risk slice and attach ON-X on every install — retention plus mix is the number the PE owner values most.
5 of 6 headline metrics improving vs prior · still off target: Recurring Mix 74.5% vs 78.0%, Net Revenue Retention 91.8% vs 94.0%, First-Time Fix Rate 87.6% vs 90.0%
Each point of churn on the $24M base is $0M of ARR gone — far cheaper to retain than to re-win.
Recurring mix 74.5% sits -29.5pts below the 45% target; ON-X is the best economics in the book at 62% GM and 110% NRR.
The annuity only renews if service holds: SLA 24% sits 75pts under 99% and first-time-fix 87.6% is 2.4000000000000057pts under 90%.
Each churn point on the base ≈ recurring revenue lost.
Recurring revenue is Pavion's most valuable asset — $24M of ARR on 19,500 contracts, renewing at 91.8%. This view is where it's defended: which service lines carry the margin, which renewals are at risk, and whether service quality is holding up the promise.
ON-X monitoring is the highest-margin, highest-retention line — the one to attach on every install.
Next four quarters. At-risk = churn-flagged or contraction-likely.
Defend first: the $2M at-risk slice. Each point of churn on the $24M base is $0M of ARR gone — far cheaper to retain than to re-win.
Recurring mix is 40% vs a 45% target; the gap is monitoring not attached at install.
ON-X is the lever: 62% GM and 110% NRR — the best economics in the book. Attaching it to every Integration install both raises margin and lifts the recurring mix.
Test & Inspection is the moat: 6,900 code-mandated contracts — sticky and recurring even at lower margin; the foot in the door for monitoring upsell.
The annuity only renews if the service is good — these are the SLAs behind it.