The Encyclopedia of Subscription & SaaS Finance Terms and Metrics

Annual Recurring Revenue (ARR)

There can be significant confusion over the term ARR, its use and the measurement of ARR because it feels and sounds like a measure of “revenue" in the context of revenue recognition. However, ARR is not necessarily a measure of recognized revenue.
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Related terms:

How to Calculate ARR ARR Components  

Monthly Recurring Revenue (MRR)

MRR is an acronym for Monthly Recurring Revenue or, very simply, a measure of your predictable revenue stream. The primary purpose of MRR is to permit performance reporting across dissimilar subscriptions terms. 
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Related terms:

CMRR How to Calculate MRR Committed MRR MRR Definition
MRR Cohort Bessemer MRR Growth Contracted MRR  

Customer Lifetime Value (CLV)

Customer lifetime value, also referred to as LTV and CLV, is the estimate of the projection of gross margin contribution per customer over the life of the average customer.
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Related terms:

Total Contract Value (TCV) Lifetime Value (LTV) New Bookings
Total Bookings  


While there are many variations of churn, churn is always a measure of attrition or loss, and it can be lost customers, contracts, MRR, GAAP revenue, contract value or bookings. 
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Related terms:

MRR Churn Revenue Churn

Financial Terms

You manage cash flow, but "finance" is left to the accountant that prepares your taxes. If this is you, read on and be sure to watch the essential finance concepts video.
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Finance for Entrepreneurs Onboarding
Normalized Contracts
Cash Flow Forecasting Bookings Unbilled AR
SaaS Subscription Models New Bookings Deferred Revenue vs. Revenue Backlog


How do you project revenues in a SaaS or subscription business? Learn More

Related terms:

Revenue Backlog Revenue Projections Revenue Recognition
Customer Revenue Deferred Revenue  

Renewal Rate

Renewal rate is a measure of retention. Renewal rate is expressed as a percentage and can mean different things to different people. 
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Related terms:

Renewal Bookings Life Cycle Renewal Rate MRR Renewal Rate

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