How Exchange Rates affect RevenueStory metrics over time?

This article covers

Does Exchange rate affect metrics overtime?

ARR and exchange rate

How does exchange rates affect the different metrics in RevenueStory? Especially MRR and ARR?

Shouldn't the MRR remain constant despite currency conversion?

What is the basis on which we calculate MRR?

How is the variance in the data accounted for in RS due to exchange rates?

Solution

For transactions, RevenueStory imports the same logic from the Chargebee for exchange rates. Transactions made in the additional currencies will be converted to the base currency using the exchange rates that you configure in them.

For MRR and ARR metrics, since they show data within a fixed time frame, this data does fluctuate over time as per the prevailing exchange rates for the period.

For Example: If your base currency is GBP and someone purchases a subscription for $100 6 months ago, it would have been around 80GBP at the time. But when we check today, it will be different because today's exchange rates are different.

What is the basis on which we calculate MRR?

MRR is a business metric, while every business wants its MRR to stay as is, the reality is the business is not fully immune to exchange rate fluctuations. Since MRR is a forward-looking metric, we are essentially trying to tell in our reports that the merchant is expected to collect $x more / less in recurring revenue as a result of the exchange rate fluctuations. We calculate the period-end exchange rates and convert the MRR in transaction currency to MRR in reporting currency based on those rates. We report this variance as part of the Net MRR growth report and also as part of the subscription histories data source within the report builder.

How is the variance in the data accounted for in RS due to exchange rates?

For calculating the MRR fluctuation due to the exchange rate for a subscription please filter the subscription in RS dashboard which Net MRR Monthly Metrics will help us understand the changes due to Exchange rate fluctuation. This fluctuation will be noticed if your subscription and RS base currency differs.