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Scheduled and Growth MRR

Net MRR Growth Rate

Measures the net percentage change in Monthly Recurring Revenue (MRR) over a specified period.

Explanation of metric

This metric tracks the overall growth or contraction of MRR, considering both expansion and contraction activities for existing subscriptions. A trend line visualizes the rate of MRR change at the end of a particular period, helping to identify growth trends and patterns in revenue stability.

How it's measured

Net MRR Growth Rate = {(New MRR + Reactivation + Upgrade + Free to paid MRR + Resumed MRR) - (Cancellation MRR + Downgrades )+ (Active to Trial MRR)/(MRR at the beginning of period)} * 100

Note:

  • Contraction MRR = Downgrade + Cancellation + Active to Trial MRR
  • Expansion MRR = Upgrade MRR + Free to Paid MRR + Reactivations

Reading

A positive rate indicates growth in revenue, reflecting successful customer acquisition and retention strategies.

Interpretation

The Net MRR Growth Rate is essential for measuring the overall health and growth rate of the business. Industry experts typically consider a Net MRR growth rate of 10-20% to be a strong indicator of business performance. This metric allows businesses to assess the effectiveness of their sales and retention strategies and adjust tactics as needed to drive growth.

Example

In a given period, the total MRR at the beginning is $5,000.

  • Expansion MRR = $3,000
  • Contraction MRR = $1,500
  • Net MRR Growth Rate = [(3000 - 1500)/5000]= 30%

Net MRR Growth by Country

Measures the net change in Monthly Recurring Revenue (MRR) over time, segmented by country.

Explanation of metric

This metric visualizes the net change in MRR during a specific period, broken down by country. A chart illustrates how new subscriptions, reactivations, upgrades, cancellations, and churn contribute to the MRR in each country. This metric helps businesses track revenue performance across different regions, offering insights into geographical areas of growth or decline.

How it's measured

Net MRR Growth by Country = [(New MRR) + (Reactivations MRR) + (Upgrades MRR) + (Free-to-paid MRR) + (Resumed MRR ) - (Churn MRR) + (Downgrades MRR)+ (Paused MRR) + (Active to Trial MRR)] by country

Reading

An upward trend in this metric indicates MRR growth, suggesting strong customer acquisition and retention in specific countries.

Interpretation

Net MRR Growth by Country is an essential metric for understanding the sustainability and regional performance of a business. A positive net MRR growth in a country indicates expansion, while a negative net MRR suggests shrinking MRR and potentially high churn rates. If this indicator is persistently negative in a country, it means the business is losing revenue faster than it can expand, signaling a need for a strategic review of that region's sales, marketing, and product-market fit.

Example

If new and reactivated subscriptions in the US contribute $4,000 in MRR, but downgrades, churn, and paused accounts cause a $2,500 loss, the Net MRR Growth for the US would be $1,500.

Net MRR Growth by Customer Type

Measures the net increase or decrease in Monthly Recurring Revenue (MRR) during a specific period, segmented by customer type.

Explanation of metric

This metric shows the net change in MRR for different customer types, accounting for new subscriptions, expansions, reactivations, and churn. A chart visually represents the MRR growth or contraction for each customer type over a period.

Note:

To use this metric effectively, you must configure a custom field at the customer resource level in Chargebee and map it to the "Customer Type" field in RevenueStory. While you can set custom values for this field, it's recommended to use values that are meaningful and relevant to your business. This feature is available with RS Premium. For configuration assistance, please contact your Customer Success Manager or contact support.

How it's measured

Net MRR Growth by Customer Type = [(New MRR) + (Reactivation MRR) + (Upgrade MRR) + (Free to paid MRR) + (Resumed MRR)] - [(Cancellation MRR) + (Downgrade MRR) + (Paused MRR) + (Active to Trial MRR)] per customer type

Reading

A positive trend signifies that a particular customer type is driving growth, indicating that this segment is highly valuable.

Interpretation

Net MRR Growth by Customer Type helps businesses measure the growth rate across different customer segments. A high growth rate for a specific customer type indicates that this segment aligns well with the product or service offering. Focusing on this customer type can increase revenue further. On the other hand, customer types with low or negative growth may require analysis to understand the reasons for churn or contraction, helping the business identify potential improvements.

Example

At the beginning of the period, the total MRR is $5,000.

  • Expansion MRR = $3,000
  • Gross MRR Churn = $1,500
  • Net MRR Growth = $3,000 - $1,500 = $1,500

Net ARR Growth

The net change in Annual Recurring Revenue over time.

Explanation of metric

A chart illustrates the net increase or decrease in Annual Recurring Revenue during the period, considering new, expansion, and churn ARR.

How it's measured

Net ARR Growth = [(New MRR) + (Reactivations MRR) + (Upgrades MRR) + (Free-to-paid MRR) + (Resumed MRR) - (Churn MRR) + (Downgrades MRR)+ (Paused MRR) + (Active to Trial MRR)] x 12

Reading

An upward trend indicates growth in ARR.

Interpretation

Tracking this metric is critical, as it reflects the net impact of all expansions and contractions in ARR. There are three key levers to control this metric: minimizing churn, driving upgrades from existing customers, and adding new paying customers.

Net ARR Growth by Country

The net change in Annual Recurring Revenue during the period segmented by country.

Explanation of metric

A chart illustrates the net change in Annual Recurring Revenue during the period, segmented by country.

How it's measured

Net ARR Growth by Country = [(New MRR) + (Reactivations MRR) + (Upgrades MRR) + (Free-to-paid MRR) + (Resumed MRR ) - {(Churn MRR) + (Downgrades MRR)+ (Paused MRR) + (Active to Trial MRR)}] x 12 by country

Reading

An upward trend indicates growth in ARR.

Interpretation

Tracking this metric is critical, as it reflects the net impact of all expansions and contractions in ARR. There are three key levers to control this metric: minimizing churn, driving upgrades from existing customers, and adding new paying customers, segmented by country. Improving the first two can significantly increase overall profitability without incurring additional expenses on new customer acquisition.

Example

In a given period for Country A:

New MRR: $25,000

Reactivations MRR: $5,000

Upgrades MRR: $10,000

Free-to-paid MRR: $8,000

Resumed MRR: $3,000

Churn MRR: $15,000

Downgrades MRR: $2,000

Paused MRR: $1,000

Active to Trial MRR: $0

Net ARR Growth for Country A:

Net ARR Growth=[(25,000+5,000+10,000+8,000+3,000)−(15,000+2,000+1,000+0)]×12 = 396,000

For Country B:

Net ARR Growth: $15,000.

Total Net ARR Growth across both countries would be $411,000, indicating strong performance in expanding revenue despite some churn.

Net MRR Growth Rate

Measures the net percentage change in Monthly Recurring Revenue (MRR) over a specified period.

Explanation of metric

This metric tracks the overall growth or contraction of MRR, considering both expansion and contraction activities for existing subscriptions. A trend line visualizes the rate of MRR change at the end of a particular period, helping to identify growth trends and patterns in revenue stability.

How it's measured

Net MRR Growth Rate = {(New MRR + Reactivation + Upgrade + Free to paid MRR + Resumed MRR) - (Cancellation MRR + Downgrades )+ (Active to Trial MRR)/(MRR at the beginning of period)} * 100

Note:

  • Contraction MRR = Downgrade + Cancellation + Active to Trial MRR
  • Expansion MRR = Upgrade MRR + Free to Paid MRR + Reactivations

Reading

A positive rate indicates growth in revenue, reflecting successful customer acquisition and retention strategies.

Interpretation

The Net MRR Growth Rate is essential for measuring the overall health and growth rate of the business. Industry experts typically consider a Net MRR growth rate of 10-20% to be a strong indicator of business performance. This metric allows businesses to assess the effectiveness of their sales and retention strategies and adjust tactics as needed to drive growth.

Example

In a given period, the total MRR at the beginning is $5,000.

  • Expansion MRR = $3,000
  • Contraction MRR = $1,500
  • Net MRR Growth Rate = [(3000 - 1500)/5000]= 30%

Total Scheduled Downgrade MRR

Total decrease in MRR of active subscriptions due to scheduled subscription changes in future.

Explanation of metric

This metric highlights the expected decline in MRR when customers downgrade their subscriptions to lower-priced plans or remove recurring features, with an effective date set in the future. It provides early visibility into revenue risks and enables businesses to plan interventions or adjust strategies to mitigate losses. Since the downgrades are scheduled, the metric serves as a forward-looking indicator of potential revenue leakage.

How it's measured

Total Scheduled Downgrade MRR = Forecasted decline in MRR due to scheduled updates to active subscriptions

Reading Decreasing values of Scheduled Downgrade MRR indicate a lesser loss in MRR due to scheduled changes in subscription. Hence, a downward trend is favourable.

Interpretation

A decreasing trend in Total Scheduled Downgrade MRR is favorable, as it suggests a lower expected revenue loss due to upcoming downgrades. Tracking this metric helps identify early signals of revenue leakage and allows businesses to implement proactive engagement or retention strategies.

Example

  • 40 subscriptions scheduled to downgrade from $120 to $90 → 40 * ($120 – $90) = $1,200
  • 25 subscriptions removing a $15 add-on → 25 * $15 = $375
  • Total Scheduled Downgrade MRR: $1,200 + $375 = $1,575 This means the business is expected to lose $1,575 in MRR when these scheduled downgrades take effect.

Note:

This report includes only the scheduled changes within the current billing period and those set to take effect upon renewal. Any scheduled changes beyond this period will not be reflected in the report.

Total Scheduled Upgrade MRR

Total increase in MRR of active subscriptions due to scheduled subscription changes in the future.

Explanation of metric

This metric highlights the expected growth in MRR when customers upgrade their subscriptions to higher-priced plans or add recurring features, with an effective date set in the future. It provides visibility into upcoming revenue gains and enables businesses to forecast growth opportunities. Since the upgrades are scheduled, the metric serves as a forward-looking indicator of potential revenue expansion.

How it's measured

Total Scheduled Upgrade MRR = Forecasted increase in MRR due to scheduled updates to active subscriptions

Reading Increasing values of Scheduled Upgrade MRR indicate more gain in MRR due to scheduled changes in subscription. Hence, an upward trend is favourable.

Interpretation

An increasing trend in Total Scheduled Upgrade MRR is favorable, as it suggests higher expected revenue from upcoming upgrades. Tracking this metric helps identify growth opportunities and measure the effectiveness of upsell and cross-sell initiatives.

Example

  • 20 subscriptions scheduled to upgrade from $100 to $140 → 20 * ($140 – $100) = $800
  • 15 subscriptions adding a $25 add-on → 15 * $25 = $375
  • Total Scheduled Upgrade MRR: $800 + $375 = $1,175 This means the business is expected to gain $1,175 in MRR when these scheduled upgrades take effect.

Note:

This report includes only the scheduled changes within the current billing period and those set to take effect upon renewal. Any scheduled changes beyond this period will not be reflected in the report.

Total Scheduled Downgrades

Total number of active subscriptions that contribute to the decrease in MRR due to scheduled subscription changes in the future.

Explanation of metric

This metric highlights the volume of customer accounts that are scheduled to downgrade their subscription plans or remove recurring features, leading to a reduction in MRR. Unlike Scheduled Downgrade MRR, which focuses on the value of revenue loss, this metric tracks the count of subscriptions driving that loss. It provides businesses with insight into the scale of customer downgrade activity and helps identify potential retention challenges.

How it's measured

Total Scheduled Downgrades = Number of subscriptions contributing to forecasted decline in MRR due to scheduled changes.

Reading Decreasing values of Scheduled Downgrades indicate fewer subscriptions contributing to MRR loss due to scheduled changes in subscriptions. Hence, a downward trend is favourable.

Interpretation

A decreasing trend in Total Scheduled Downgrades is favorable, as it shows fewer subscriptions are contributing to potential future revenue loss. This metric can be used alongside Scheduled Downgrade MRR to analyze both the breadth (number of subscriptions) and depth (revenue value) of downgrade activity.

Example

  • 45 subscriptions are scheduled to move from higher-priced plans to lower-priced plans.
  • 20 subscriptions are scheduled to remove a recurring $10 add-on.
  • Total Scheduled Downgrades: 45 + 20 = 65 This indicates that 65 active subscriptions are expected to contribute to scheduled revenue loss in the future.

Note:

This report includes only the scheduled changes within the current billing period and those set to take effect upon renewal. Any scheduled changes beyond this period will not be reflected in the report.

Total Scheduled Upgrades

Total number of active subscriptions that contribute to the increase in MRR due to scheduled subscription changes in the future.

Explanation of metric

This metric highlights the volume of customer accounts scheduled to upgrade their subscription plans or add recurring features, leading to increased MRR. Unlike Scheduled Upgrade MRR, which focuses on the value of revenue gained, this metric tracks the count of subscriptions driving that gain. It provides insight into the scale of customer upgrade activity and helps identify growth adoption trends.

How it's measured

Total Scheduled Upgrades = Number of subscriptions contributing to forecasted increase in MRR due to scheduled changes.

Reading Increasing values of Scheduled Upgrades indicate a larger number of subscriptions contributing to MRR gain due to scheduled changes in subscriptions. Hence, an upward trend is favourable.

Interpretation

An increasing trend in Total Scheduled Upgrades is favorable, as it suggests a larger number of subscriptions are contributing to expected future revenue growth. This metric complements Scheduled Upgrade MRR by providing the volume dimension of upgrade activity.

Example

  • 35 subscriptions are scheduled to move from lower-priced plans to higher-priced plans.
  • 20 subscriptions are scheduled to add a recurring $20 add-on.
  • Total Scheduled Upgrades: 35 + 20 = 55 This indicates that 55 active subscriptions are expected to contribute to scheduled revenue gains in the future.

Note:

This report includes only the scheduled changes within the current billing period and those set to take effect upon renewal. Any scheduled changes beyond this period will not be reflected in the report.

Total Paused Subscription MRR

Total Monthly Recurring Revenue (MRR) lost from subscriptions that have been paused.

Explanation of metric

A trend line illustrates the monthly recurring revenue loss associated with paused subscriptions. Additionally, a point-in-time KPI indicates the MRR lost from paused subscriptions in the current period, along with a comparison to the previous period and the percentage change between both periods.

How it's measured

Total Paused Subscription MRR = Change in MRR when an ACTIVE paid subscription transitions to PAUSED status.

Reading

A downward trend in the "Total Paused Subscription MRR" metric indicates a reduction in the loss of MRR due to paused subscriptions.

Interpretation

While paused subscriptions are not categorized as churn, they do affect overall MRR. A rise in paused subscription MRR suggests that customers may be facing challenges that lead them to temporarily suspend their subscriptions, indicating potential issues with customer satisfaction or product value. Monitoring this metric can help identify trends in customer engagement and inform retention strategies.

Example

In a given period:

  • Number of paused subscriptions: 70
  • Average Revenue Per Paid Subscription (ARPPS): $30
  • Paused MRR Calculation: (70 x 30) = $2,100 This example shows a total of $2,100 in MRR lost due to paused subscriptions, highlighting the financial impact of customers temporarily disengaging.

Total Free to Paid MRR

Measures the additional Monthly Recurring Revenue (MRR) earned from active subscriptions that transition from free plans to paid plans.

Explanation of metric

A trend line visualizes the MRR generated by subscriptions that have moved from free plans to paid plans. Additionally, a point-in-time Key Performance Indicator (KPI) is available to show the current period's free-to-paid MRR and the variance compared to the previous period, alongside the percentage change in MRR across both periods.

How it's measured

Total Free to Paid MRR = Total MRR when an ACTIVE Subscription moves from Free to Paid.

Note:

This excludes conversions from "IN TRIAL" to "ACTIVE."

Reading

Indicates increased revenue from converting free users to paying customers, signaling product value and successful customer retention.

Interpretation

An increase in Free to Paid MRR suggests that customers find the product or service offering valuable enough to move from a free plan to a paid plan. This metric is a strong indicator of the success of the freemium model and can be used to track the transition of users from free to paid plans. Monitoring this metric helps businesses understand how well they are converting free users to paying customers and can guide strategies for improving user onboarding, product engagement, and feature offerings.

Example

For a given period:

  • Free Trial Subscriptions = 1,300
  • Free Trials converted to Paid Subscriptions = 300
  • ARPU (Average Revenue per User) = $20
  • Free to Paid MRR = (300 × 20) = $6,000

Total Free to Paid MRR by Plan

Tracks the additional Monthly Recurring Revenue (MRR) earned from subscriptions that move from free to paid plans, segmented by specific plans.

Explanation of metric

This chart visualizes the MRR generated from subscriptions that transitioned from free to paid, categorized by the respective plans. A point-in-time Key Performance Indicator (KPI) highlights the MRR generated from free-to-paid transitions during the current period. It also shows the variance compared to the previous period and the percentage change in MRR across both periods.

How it's measured

Total Free to Paid MRR by Plan = Change in MRR when an ACTIVE Subscription moves from FREE to PAID Plan.

Reading

An upward trend Indicates the product is successfully converting free users to paying customers, boosting revenue.

Interpretation

This metric shows how well each plan converts free users to paying customers. A consistent increase implies that the product's value is compelling users to upgrade from free to paid plans. If the metric shows a downward trend, it may indicate that the value offered by the free plan is sufficient for customers, or there is a misalignment between customer expectations and the perceived value of the paid plans. Analyzing this by plan provides insights into which pricing tiers need adjustment.

Example

For a given period:

  • Free Trial Subscriptions = 1,300
  • Free Trials converted to Paid Subscriptions = 300
  • ARPU (Average Revenue per User) = $20
  • Free to Paid MRR by Plan = (300 × 20) = $6,000 This means that $6,000 in additional MRR was generated from the 300 free subscribers who transitioned to paid subscriptions during this period.

Total Reactivation MRR

Tracks the additional Monthly Recurring Revenue (MRR) generated from previously churned or canceled subscriptions that have been reactivated under paid plans.

Explanation of metric

A chart shows the MRR earned from reactivated subscriptions, where customers who previously churned or canceled their subscriptions have returned to paid plans. This metric also has a point-in-time Key Performance Indicator (KPI) that displays the current Reactivation MRR, compares it to the previous period, and highlights percentage changes across periods.

How it's measured

Total Reactivation MRR = Total MRR of subscriptions reactivated after cancellation.

Note:

Reactivations that occur in the same period as the cancellation are excluded.

Reading

An upward trend Indicates strong re-engagement and retention efforts.

Interpretation

A rise in this metric shows effective efforts by the marketing or customer success teams to win back previously churned customers. However, businesses should also assess the costs involved in reactivation. Higher Reactivation MRR indicates returning customers still find value in the product or service.

Example

During a given period:

  • 5 churned customers reactivated their subscriptions.
  • Each customer subscribed to a $100/month plan.
  • Total Reactivation MRR for the month = 5 × $100 = $500.

Total Reactivation MRR by Plan

Tracks the additional Monthly Recurring Revenue (MRR) generated from previously canceled subscriptions that have been reactivated, segmented by the specific plans to which customers returned.

Explanation of metric

A chart displays the MRR earned from reactivated subscriptions segmented by plan. This allows for tracking which plans are most effective in regaining lost customers.

How it's measured

Total Reactivation MRR by Plan = Total MRR of subscriptions reactivated after cancellation, segmented by plan.

Note:

Reactivations that occur in the same period as the cancellation are excluded.

Reading

An upward trend indicates successful customer re-engagement and retention for specific plans.

Interpretation

This metric highlights the revenue regained from reactivating lost customers, broken down by plan. Higher Reactivation MRR for a particular plan suggests that the plan continues to offer value to returning customers. If certain plans show low reactivation, they may need further attention in terms of features or pricing.

Example

During Q2, for Plan A:

  • Reactivated Subscriptions: 10 previously canceled customers reactivated their subscriptions.
  • MRR per Reactivated Subscription: $120/month.
  • Total Reactivation MRR (Plan A): 10 × $120 = $1,200.

For Plan B:

  • Reactivated Subscriptions: 5 customers returned.
  • MRR per Reactivated Subscription: $200/month.
  • Total Reactivation MRR (Plan B): 5 × $200 = $1,000.

Plan C had a lower number of reactivations:

  • Reactivated Subscriptions: 3 customers returned.
  • MRR per Reactivated Subscription: $80/month.
  • Total Reactivation MRR (Plan C): 3 × $80 = $240.

In this quarter, Plan A saw the highest Reactivation MRR with $1,200, indicating strong customer re-engagement efforts. Plan B followed closely with $1,000, suggesting that while fewer customers reactivated, the higher price point contributed to meaningful MRR recovery. Plan C lagged behind with just $240 in reactivation, indicating a potential need to revise the features or pricing to attract more returning customers.

Total CMRR

The projected Monthly Recurring Revenue (MRR) considering all scheduled changes such as upgrades, downgrades, and cancellations.

Explanation of metric

A table displays the Committed Monthly Recurring Revenue (CMRR) as a projection of how your current MRR will evolve over the next 12 months. It includes any future scheduled upgrades, downgrades, or cancellations, providing a clearer view of your revenue trajectory.

How it's measured

Total CMRR = [(Total MRR at the beginning) + (New MRR) + (Expansion MRR) - (Contraction MRR)]

Note:

  • Expansion MRR is the additional revenue from existing subscriptions (upgrades, add-ons).
  • Contraction MRR or Gross MRR Churn is the reduction in MRR due to downgrades, cancellations, and churn.

Reading

An upward trend indicates growth in future revenue.

Interpretation

CMRR provides a more reliable financial forecast than MRR alone, as it factors in scheduled changes like churn and expansion. It is especially useful for revenue forecasting and assessing a SaaS company's financial health over time. By incorporating future downgrades and cancellations, CMRR offers a more conservative and accurate outlook for future revenue. This metric can also be used to make more informed strategic decisions.

Example

In a given period:

  • MRR = $1M
  • MRR for new subscriptions = $350K
  • MRR for downgrades and churned subscriptions = $500K
  • CMRR = $1M + $350K - $500K = $850K.

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