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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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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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.
Always know your CLV:CAC Ratio
Revenue Recognition is an accounting principle and a process for reporting revenues by recognizing the monetary value of a transaction or contract over a period of time as the revenue is “earned.”
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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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