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SaaS Definitions
Recurring Revenue Metrics
Recurring Revenue Metrics
Recurring Revenue Metrics
Metric
Notes
Context and Analysis
Critical?
1
Annualized Recurring Revenue (ARR)
ARR should generally be reported once you are contractually able to recognize revenue.
Best viewed over time across years (three), quarters (eight), months (trailing 12). Analyze the percentage rate of periodic change.
Yes
2
Monthly Recurring Revenue (MRR)
MRR should generally be reported once you are contractually able to recognize revenue.
Best viewed over time across years (three), quarters (eight), months (trailing 12). Analyze the percentage rate of periodic change.
Yes
3
"Committed" Annualized Recurring Revenue (CARR)
This metric shows revenue commitments that may not yet be in place, i.e. it shows recurring revenue that has been contracted, regardless of whether the subscription period has started.
Best viewed over time across years (three), quarters (eight), months (trailing 12). Analyze the percentage rate of periodic change.
4
"Committed" Monthly Recurring Revenue (CMRR)
This metric shows revenue commitments that may not yet be in place, i.e. it shows recurring revenue that has been contracted, regardless of whether the subscription period has started.
Best viewed over time across years (three), quarters (eight), months (trailing 12). Analyze the percentage rate of periodic change.
5
Beginning Run Rate
ARR to begin the period (which equals ending ARR from the prior period).
Run Rate Walk component #1
Analyzed as part of a "Run Rate Walk" that shows all sources and changes of recurring revenue over time.
6
New ARR
New ARR added from new customers signed in the month.
Run Rate Walk component #2
Analyzed as part of a "Run Rate Walk" that shows all sources and changes of recurring revenue over time. Best analyzed as a percentage of the year-ago period to show growth from new versus existing customers.
7
Upsell ARR
New ARR added from existing customers signed in the month.
Run Rate Walk component #3
Analyzed as part of a "Run Rate Walk" that shows all sources and changes of recurring revenue over time. Best analyzed as a percentage of the beginning run-rate year-ago period to show growth from new versus existing customers.
8
Downsell ARR
Lost ARR from existing customers that still have active contracts.
Run Rate Walk component #4
Analyzed as part of a "Run Rate Walk" that shows all sources and changes of recurring revenue over time.
9
Churned ARR
Lost ARR from existing customers that no longer have active contracts.
Run Rate Walk component #5
Analyzed as part of a "Run Rate Walk" that shows all sources and changes of recurring revenue over time.
10
Ending Run Rate
Ending ARR for a period.
(Beginning ARR + New ARR + Upsell ARR - Downsell ARR - Churned ARR)
Run Rate Walk component #6 (final component)
Analyzed as part of a "Run Rate Walk" that shows all sources and changes of recurring revenue over time.
Yes
11
Net Expansion ARR
Measures ARR change from existing customers (also known as DRR).
(Upsell ARR - Downsell ARR - Churned ARR)
Expansion MRR from the existing customer base.
12
Net New ARR
Total change in ARR period over period.
(New ARR + Upsell ARR - Downsell ARR - Churned ARR)
This is a critical report to show growth.
Yes
13
Average Revenue Per Account (ARPA) for new customers
Average MRR across new customers.
Best viewed over time across years (three), quarters (eight), months (trailing 12). Analyze the percentage rate of periodic change.
Yes
14
ARPA across the installed base
Average MRR per customer across the existing customer base.
Best viewed over time across years (three), quarters (eight), months (trailing 12). Analyze the percentage rate of periodic change.
Yes
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