In a subscription business, there are different types of ARR (Annual Recurring Revenue) and MRR (Monthly Recurring Revenue) that can be used to measure the company’s growth and predict future revenue streams. Some common types of ARR/MRR that SaaS subscription management platforms offer are discussed below.
Gross MRR/ARR: This is the total revenue generated by all active subscriptions in a given period, before any deductions or cancellations.
Net MRR/ARR: This is the revenue generated by all active subscriptions in a given period, minus any discounts, refunds, or cancellations.
New MRR/ARR: This is the revenue generated from new subscriptions acquired in a given period.
Expansion MRR/ARR: This is the revenue generated from existing subscriptions that have increased in price or added additional features in a given period.
Churned MRR/ARR: This is the revenue lost from subscriptions that were cancelled or not renewed in a given period.
Tracking and analyzing these different types of ARR/MRR can help a subscription business identify areas for growth and optimization, as well as forecast revenue streams more accurately.
