MRR Analytics Intro

Please be aware that MRR Analytics are currently in beta status.

What is MRR?

Monthly Recurring Revenue, or MRR, is one of the most important operational metrics for SaaS businesses. It is a measure of your expected monthly recurring revenue based on snapshots of your subscriber base.

The best practice is to use MRR as an operational metric rather than a financial metric. We strongly encourage you to not rely on MRR as an apples-to-apples representation of your financial reports, as it is expected recurring revenue.
  • As customers sign up and upgrade, MRR goes up.
  • As customers downgrade or churn, MRR goes down.

For subscribers who pay monthly, the MRR is simply the price paid each month for their subscription. If customers are paying for more than one month up front (e.g. 12 months), the MRR is calculated as the amount paid divided by the number of months in the subscription period.

What is included?

  • Product costs
  • Quantity-based components are normalized and included.
  • On/off components are normalized and included.
  • Discounts/coupons are deducted prior to calculation.
  • Metered charges are hidden by default but can be revealed.
  • On-hold subscriptions are included
On-hold subscriptions are included in the calculation of MRR. If your subscriber is not scheduled to transition from on-hold to active anytime soon, please cancel the subscriber instead. You may use the reactivation subscription action when the subscriber is ready to re-purchase your product or service..

What is not included?

  • One time charges
  • One-time payments
  • Components: Mid-period prorated component allocation costs
  • Any charges incurred during the trial status are excluded. This includes setup fees & trial charges.
  • Taxes

MRR Webinar

For a brief overview of what the MRR offers, we recommend viewing an archived copy of our webinar that was showcased upon release of the feature. You can access the video below:

Examples

  • A subscriber on a $10/mo plan (with no other add-on charges) has an MRR value of $10.
  • A subscriber on a $120/year plan (with no other add-on charges) also has an MRR value of $10.
  • A subscriber on a $10/mo base plan with 10 $1 widgets (a quantity-based component) has an MRR value of $20.
  • A subscriber on a $10/mo base plan who uses $20 worth of metered minutes in one month and $15 worth of metered minutes in the next month has an MRR of $10.

Note that MRR is not the same as “cash received”. It is a snapshot of the current value of your subscribers. This makes MRR a great leading indicator of your business performance, since signups, growth, and churn impact the metric as they happen.

Using Chargify MRR Reports

Your MRR Analytics Reports are available from the “Analytics” tab, within the “MRR Report” sub-tab.

Overview of Chargify MRR reports

MRR Growth

MRR Growth (also known as MRR Movement) shows you how your MRR is changing over time. It tracks the incremental changes due to MRR-impacting events across 5 categories:

  • New Business: Increases in MRR from new customers, such as new signups or conversions from trial/free to paid. See the section below about optimizations around New Business MRR.
  • Expansion: Increases in MRR due to upgrades or increases of add-ons/extras.
  • Contraction: Decreases in MRR due to downgrades or decreases of add-ons/extras.
  • Churn: Decreases in MRR due to subscription cancellations, account closures, or downgrades to a free level
  • Reactivation: Increases in MRR due to accounts canceled within the last 90 days becoming active again.

Your Net MRR Growth is essentially the sum of these 5 categories:

Net Growth = New Biz + Expansion - Contraction - Churn + Reactivation

New Business MRR Optimizations

If New Business MRR is recorded for a customer and then they upgrade or downgrade within the same calendar month, we count the upgrade or expansion as additional New Business MRR for the same subscriber.

This might happen if a new customer signs up and then quickly realizes they are interested in one of your more expensive plans. Since they are essentially still “new to you”, we lump both of these actions into “New Business” instead of “New Business” followed by “Expansion”.

MRR Table Data

We present MRR Growth both as a chart and as a table of data. Note that you can click any cell of the table to drill into the accounts that comprise the data you see:

Total MRR growth / changes

Total MRR

  • Your Total MRR is the point-in-time value of the total MRR across your entire subscriber base.
  • The MRR at the end of any period or timerange is correlated to your Net MRR Growth:
Period-end MRR = Period-start MRR + Net MRR Growth
Total MRR data

Total MRR will correlate loosely to cash received, but the values will not be the same. MRR deviates from cash due to the timing of changes, when sales are booked vs. received, monthly normalization (ammortization), and other factors.

Enabling Product And Component Filters

Your MRR analytics can be filtered by products and components. This allows you to drill in to your product catalog to understand how subsets of products and components are performing.

To use the product and component filters, we will need to disable your analytics reports to generate data to support filtering. This should take no longer than 1 hour and will only need to be done once. To opt in, use the link in the banner shown below:

Opt-in for filters

Once the opt in process is complete, you will have access to the product and component filters.

Using Product And Component Filters

Select "Enable Filters" in your report

Click ‘Enable Filters’ to begin filtering your MRR report.

When filters are enabled, there are a few details to keep in mind:

  • Metered component revenue (or “usage”) is automatically included by default and categorized using traditional MRR categories such as New Business, Expansion, Contraction, etc.
  • We show individual product and component revenue movements, as opposed to net per-subscriber revenue movements. This allows us to accurately display per-item movements, but will also cause Expansion and Contraction to differ when filters are enabled versus disabled. Net Growth will remain the same.
  • We have introduced a “Switch” category to show how revenue flows between products. For example, if a customer upgrades from $200/month Product A to $500/month Product B, revenue when viewing Product B would show $200 as switch revenue and $300 as expansion.

Use the ‘Products’ filter to filter subscribers by product. Then, for the selected product subscribers, you can use the ‘Charges’ filter to include or exclude product and component revenue.

Select a particular product or component, or group of each

MRR Activity & Events

In order to drill deeper into what is affecting your MRR Movements, we provide an Activity view of all events that impact your MRR.

This is available via any of the following methods:

  • Clicking the “View Details” button when hovering a bar in the MRR Growth Chart.
  • Clicking a cell in the data table for a given MRR category in a period.
  • Clicking the “View Details” button when hovering a bar in the Total MRR Chart.

From within the Activity popup, you can change the category filter to see just certain kinds of activity or everything.

View details for the current view

Date & Interval Picker

The date and interval picker allows you to select the date range and period interval (day, week, month, or quarter) you would like to view.

Selecting a particular month to report MRR

For your convenience, we provide several helpful defaults (“This Month”, “Last Month”, “Year to date”, etc.) using the menu built into the picker.

Changing of the reporting interval

Trend Stats

Snapshot of trend stats

The Trend Stats at the top of the page give you a quick, at-a-glance view of your current Total MRR and how it compares to history. The percentage change indicators describe how your current MRR compares to those points in the past.

Customizing MRR Reports

Chargify offers you two options for customizing your MRR reports. You can elect to have a Daily MRR Summary Email sent to your inbox. Additionally, you can select the option to include MRR from components in your report. Please continue to read instructions below to understand how to customize your MRR reports.

Daily MRR Summary Email

If you love looking at your MRR numbers every day, you will definitely want to opt-in to the Daily MRR Summary Email!

Example of Chargify MRR report email

Steps to enable the Daily MRR Summary Email

  1. Click “MRR Settings” in the upper right of your MRR page
  2. Click the checkbox next to “Send me a Daily MRR Summary email”
  3. Optionally, enter in “Additinal Recipients” any other email addresses that you wish to receive the email
Want to disable MRR daily summary emails?
Uncheck the box and you'll no longer receive emails of this nature.
Select "View Email Settings"
Enable daily MRR summary email to be sent to your user account

The daily summary email is sent early each morning (approximately 4am in your Site’s configured time zone) to all of the recipients.

All time ranges are computed in relation to your Site’s configured time zone. The email does not contain any data related to activity that has occurred after midnight in that zone - that data will be on tomorrow’s email!

  • Yesterday: Midnight-to-midnight for the prior day
  • This Week: Activity from Monday at 12am until last night at midnight
  • This Month: Activity from 12am on the first of the month until last night at midnight.

Displaying Component-based Metered Usage in MRR

Toggle on/off the option to view metered usage in your MRR reports easily be selecting the option below. Once enabled, MRR will appear as part of the report as a light grey, transparent bar.

Select the option to display usage in MRR reports
Example of component revenue in MRR reports

Digging Deeper: About our MRR Calculations and Best Practices

We’ve made some choices that align with MRR best practices and give you the best view of your business:

Coupons and Discounts

Coupons are removed from plan charges before arriving at your MRR numbers. A new subscriber to your $100/mo plan with a 20% off, 3-month coupon would yield $80 in New Business MRR for the first 3 months, then $100 in MRR (of which $20 is expansion MRR) when the coupon expires.

Adjustments and Credits

Occasionally you may apply temporary service credits for individual subscribers. For example, a $100/mo subscriber may have a bad experience and is given $20 off their next bill as a goodwill gesture. We would maintain an MRR of $100 for this subscriber. Even though you will only collect $80 in this month from this subscriber, they are still valued at $100/mo. In this scenario, MRR can diverges slightly from cash flow - see our note on Financial Data below.

On the other hand, some subscribers may be comped an amount that exceeds one month’s bill. We consider this an MRR impacting event, and will adjust MRR down when the credit is applied and back up with the credit expires.

In short: partial service credits do not affect MRR, while long-term credits do affect MRR.

Refunds

Refunds do not affect MRR in Chargify. The way we present MRR is that it’s a “present monthly value” of a subscription. If a subscriber is “valued” at $100/mo, giving them a refund does not change what they are “worth” to you going forward. They are still worth $100/mo until they change their subscription.

If you wish to see the effects of refunds on revenue, then we suggest viewing the finance report’s section on refunds.

Annual Plans

The value of annual plans is amortized to a monthly number for MRR purposes. A subscriber to a $1200/year plan has an MRR value of $100/mo. We normalize any billing frequency to monthly for MRR purposes.

Prepayments

Sometimes a subscriber on monthly billing prepays (usually via check payment) for several months, or even several years. We assign MRR value based on the monthly value, despite the prepayment. A $100/mo subscriber who sends in a $2400 check to prepay for 2 years still has an MRR value of $100. If they were to upgrade to a $200/mo plan, this would be Expansion MRR of additional $100, pushing their value to $200/mo.

Invoice Billing

MRR is assigned to a subscription when their payment becomes due. A subscriber who signs up for your $1000/mo plan on an invoice-billing basis is counted immediately as $1000/mo in new business, even before you’ve received their check.

Dunning

MRR is expected recurring revenue. For example, if a payment fails and a subscription goes past due, MRR is not immediately affected since you still expect to receive the money. If the dunning strategy completes and the subscription is canceled, then it will be shown as churn at the time of cancellation.

There is one exeception to the above rule — a subscription that enters dunning immediately after trial due to a failed payment. Although revenue is expected at this point, the subscription’s revenue is not included in MRR because no payment has been collected.

Components, Add-Ons, & Usage

Chargify’s flexible component system helps you address a wide-array of billing scenarios. Often, some components of your billing are considered to be part of MRR, while others are considered to be non-MRR usage.

In this release, we have set a rule-of-thumb:

  • Quantity-based components and on-off components (which maintain their value until changed) are always a part of MRR
  • Metered components (whose usage resets to 0 each period) are exempted from MRR by default.
  • You can enable metered usage MRR, by following the directions on “Displaying Component-based Metered Usage in MRR”

If your business tends to equate usage revenue with MRR, you can have adjust your MRR settings to include usage revenue from the settings drown down. One-time charges are not part of MRR.

Prorated Components

As mentioned above, quantity-based and on-off components are added to MRR reports. However, if a component is added in the middle of a billing period, this is not reflected in the corresponding month’s MRR report.

Example:

  • A Subscriber signs up for the Gold monthly plan in January.
  • They are allotted $100 for a mix of on/off, quantity-based and metered components
  • Their next billing date is February 15th
  • The MRR report for January will not reflect the addition of the components
  • The MRR report for February will reflect the addition of the components under New Business

CSV Exports

Similar to the Finance Report, you can export the data from your MRR Report as a CSV.

There are two MRR exports available:

MRR Movements: This export contains a list of MRR movements that occurred in the selected month.

Total MRR: This export contains total MRR per subscription for the selected month.

Simply click on the Export CSV button and then choose the export type and month you wish to export:

Export options

For a complete list of the columns in the CSV export, please view the Export documentation.

Override

At this time, overriding subscriptions data via the API will not affect its placement in the month it occurs in MRR reports.

FAQ

If you have any further questions that were not addressed in the content above, we encourage you to view the MRR FAQ documentation.