What is the difference between “committed” and “contracted” MRR?
Contracted Monthly Recurring Revenue is the value of contracted recurring portion of subscription revenue. It is a close cousin of Committed Monthly Recurring Revenue. In some/most businesses, these metrics are identical. The nuance is that Contracted Monthly Recurring Revenue includes only contractually guaranteed revenues.
For term-based subscription businesses, CMRR is the value of the Contracted MRR from the booking date through the subscription end date. It excludes revenues that are not recurring even if such revenues are on a revenue recognition schedule. Variable fees are not typically included.
For month-to-month businesses (no term agreement), Contracted Monthly Recurring Revenue is the minimum contracted component of the service fee. For example, you pay $29.95 per month for a phone line. You pay $.02 per minute for each call. Contracted Monthly Recurring Revenue includes the $29.95 and excludes all fees for calls.
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