CMRR and CARR calculation

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 current snapshot 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 (revenue already billed – a measure of the past) while CMRR is what you see through the windshield (committed revenue to come – a forward-looking view).

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

3. How does Fincome calculate CMRR?

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

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

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

• - cancelled subscriptions: any planned future cancellation leads to 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 of departure is no longer counted in committed revenue after the churn notification date.

CMRR calculation example : 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 (as of 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

The 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 the contractually secured recurring revenue in annual terms.

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.