Calculation of CMRR and CARR

Understand how Fincome calculates CMRR (Committed Monthly Recurring Revenue) and CARR (Committed Annual Recurring Revenue) from ongoing contractual commitments.

1. What is CMRR?

CMRR is a snapshot-to-date of the monthly value of all your current and future subscriptions. It is aligned with events that inform future billing and is always one step ahead of MRR. CMRR includes:

• Current MRR

• Future new subscriptions (from the signing date)

• Future churn (from the cancellation request date)

2. What is the difference between CMRR and MRR?

MRR and CMRR are two indicators related to recurring revenue, but with different perspectives. You can compare them to the view from a moving car: MRR is what you see in the rearview mirror (revenues already billed – a measure of the past) while CMRR is what you see through the windshield (committed future revenue – a forward-looking view).

Note: Future MRR and CMRR are both forward-looking views, but with an important nuance: the way they are modeled. In short, CMRR today reflects the guaranteed monthly value of all current and future subscriptions, whereas future MRR models that value as of the date those subscriptions actually start.

3. How does Fincome calculate CMRR?

To calculate CMRR, Fincome relies on subscription and billing data and applies rules ensuring only future revenues that are already committed (secured) are retained. Concretely, CMRR is calculated as follows:

• The current MRR of all your active subscriptions as of the analysis date (your current recurring revenue).

• + Future new subscriptions whose contract is already signed, from the signing date (even if they start later). For example, a contract signed in June for a September start contributes to CMRR from June.

• - canceled subscriptions: any planned future cancellation results in the removal of the corresponding MRR from CMRR as soon as the cancellation is confirmed (the revenue is no longer considered “committed” beyond the end date). In other words, a subscription that has given notice to leave is no longer counted in committed revenue after the churn notification date.

Example of CMRR calculation : Suppose that on January 1 your current MRR is €100,000. You have: a new signed contract that will add €20,000 of MRR from March 1, and a €10,000 MRR subscription that announced its cancellation effective February 28.

Current MRR (on January 1): €100,000

+ New committed subscription : +€20,000 (from signing, even if starting in March)

– Upcoming churn (end of Feb.) : –€10,000 (removed from committed revenue beyond Feb)

= CMRR on January 1 : €110,000

4. CARR: annual projection of CMRR

CARR (Committed Annual Recurring Revenue, or committed annual recurring revenue) is simply the annual projection of CMRR. It is the same concept extended over 12 months: CARR = CMRR × 12. This metric expresses in annual value the recurring revenue already contractually secured.

Example : With a CMRR of €110,000, CARR amounts to €1,320,000 (that is 110,000 × 12). This figure represents the annual recurring revenue already contractually committed for your company.