CMRR

Committed Monthly Recurring Revenue

A metric used by subscription-based businesses, particularly Software-as-a-Service (SaaS) companies, to measure the predictable and recurring revenue expected from customers for the next month, taking into account any known upgrades, downgrades, or churn. CMRR is an important KPI because it provides:

1. Short-term predictability: CMRR provides a more accurate picture of the expected recurring revenue for the next month, considering known changes in customer subscriptions.
2. Churn and growth visibility: By tracking CMRR, companies can better understand the impact of customer churn, upgrades, and downgrades on their monthly recurring revenue.
3. Operational planning: CMRR helps businesses make informed decisions about resource allocation, staffing, and short-term investments based on the projected month’s expected revenue.
4. Investor insight: CMRR is a valuable metric for investors to gauge a subscription-based business’s short-term health and stability.

Committed Monthly Recurring Revenue Formula

Loading formula...

Where:

• Loading formula...$\text{CMRR}&s=2$ is the Committed Monthly Recurring Revenue for the next month
• Loading formula...$\text{MRR}&s=2$ is the current Monthly Recurring Revenue
• Loading formula...$\text{Upgrades}&s=2$ is the sum of all known subscription upgrades for the next month
• Loading formula...$\text{Downgrades}&s=2$ is the sum of all known subscription downgrades for the next month
• Loading formula...$\text{Churn}&s=2$ is the sum of all known subscription cancellations for the next month

To calculate CMRR, start with the current MRR, add the value of any known upgrades, subtract the value of any known downgrades, and finally, subtract the value of any known churn for the upcoming month.

CMRR provides a more accurate short-term forecast compared to MRR by considering known changes in customer subscriptions. However, it’s important to note that CMRR does not account for any new sales or unexpected changes in customer subscriptions that may occur during the next month.

• Abbreviation: CMRR