SaaS Committed Monthly Recurring Revenue (CMRR) Calculator

Think of CMRR as the guaranteed monthly income from your SaaS contracts, like having a locked-in stream of revenue, rather than just what you’ve invoiced. This provides a clear picture of your future financial stability.

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    Predictable Revenue Benefit

    CMRR allows you to visualize stable monthly income, enhancing future income predictability.

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    Financial Health Insight

    Tracking CMRR provides insights into financial health, aiding in better financial management and resource allocation.

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    Identify Growth Strategies

    Analyzing CMRR trends helps uncover growth strategies and pinpoint areas for improvement.

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SaaS Committed Monthly Recurring Revenue (CMRR)

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CMRR is calculated by adding Beginning CMRR, New Bookings CMRR, and Expansion CMRR, then subtracting Churned CMRR. This metric helps track the committed recurring revenue of your SaaS business.

How to Calculate SaaS Committed Monthly Recurring Revenue (CMRR)

To accurately determine your SaaS Committed Monthly Recurring Revenue (CMRR), follow these steps:

  1. Identify the Beginning CMRR. This is your total monthly recurring revenue at the start of the period. For example, a small SaaS startup might have a Beginning CMRR of $10,000, while a larger company might start at $500,000. You can find this number in your financial systems where subscriptions are tracked.
  2. Calculate the New Bookings CMRR. This represents the monthly recurring revenue from new customers acquired during the period. For instance, if you secured $2,000 from new contracts, this is your New Bookings CMRR. Look for this data in your CRM or systems tracking upgrades.
  3. Determine the Churned CMRR. This is the revenue lost due to canceled subscriptions. If, say, you lost $800, this would be your churned CMRR. You can find this value in your subscription management systems.
  4. Calculate the final CMRR by adding the Beginning CMRR, New Bookings CMRR, and any Expansion CMRR, then subtract the Churned CMRR. Using our examples, $10,000 (Beginning) + $2,000 (New) + $500 (Expansion) – $800 (Churn) = $11,700. This final amount is your CMRR.

Note: Ensure all values are the monthly amounts and based on the committed contract terms.

SaaS CMRR = Beginning CMRR + New Bookings CMRR + Expansion CMRR – Churned CMRR

Understanding SaaS Committed Monthly Recurring Revenue (CMRR)

Ioana Grigorescu

dezembro 17, 2024

What is SaaS Committed Monthly Recurring Revenue (CMRR)?

SaaS Committed Monthly Recurring Revenue (CMRR) represents the revenue that a company expects to earn each month from its existing contracts and subscriptions, assuming they continue as planned. This figure includes expected revenues from deals likely to be renewed, providing a more predictable financial forecast compared to regular Monthly Recurring Revenue (MRR), which might count uncertain future earnings.

  • Predict future revenue with a clear view of committed subscriptions.

  • Assess business health with an accurate snapshot of recurring revenue.

  • Measure sales and marketing effectiveness by identifying drivers of committed growth.

Practical Examples of SaaS Committed Monthly Recurring Revenue (CMRR)

  • Example 1: In a software company, if you have 100 customers committed to a basic plan of $50 per month, your CMRR would be $5,000. This is calculated by multiplying the number of customers (100) by the monthly fee per customer ($50).
  • Example 2: For a higher-tier offering, imagine a SaaS provider has 50 clients on a premium plan that costs $200 monthly. Here, the CMRR is $10,000. This is determined by multiplying the number of premium subscribers (50) by their subscription rate ($200).
  • Exemplo 3: Consider a scenario where a company offers a seasonal discount for the first quarter, reducing the price to $30 per month for the basic plan. If the number of subscriptions during this period is 200, the CMRR would drop to $6,000. This decrease reflects the promotional discount influencing the revenue.

This table provides a sample view of Committed Monthly Recurring Revenue (CMRR) over three months, demonstrating how to calculate and analyze changes.

Month New CMRR Churned CMRR Net New CMRR Total CMRR MoM Change MoM Change (%)
Month 1 $5,000 $500 $4,500 $100,000 – –
Month 2 $6,000 $700 $5,300 $105,300 $5,300 5.3%
Month 3 $7,000 $600 $6,400 $111,700 $6,400 6.1%

The data shows a positive trend in CMRR, with both net new CMRR and total CMRR increasing each month. This indicates healthy growth and effective customer retention strategies.

CMRR = $105,300 + $7,000 + $0 – $600 = $111,700

Different Ways to Calculate CMRR

  • Basic CMRR: The sum of all committed monthly revenue from active subscriptions, considered as the average monthly income.
  • CMRR with Upsells: Includes new subscriptions and revenue from customers upgrading their plans. Tracks the effect of upselling.
  • CMRR with Downgrades: Accounts for revenue lost from customers downgrading their plans. Offers a clearer picture of net revenue changes.
  • CMRR with Churn: Considers new subscriptions, upsells, and promotional offers, but also includes revenue lost due to churn. Helps understand the overall monthly revenue and the impact of customer turnover.
  • Adjusted CMRR: Incorporates discounts, promotional offers, and Conversion Rate Optimization activities affecting conversion likelihood. Provides a detailed prediction of future revenue.

How to Improve Your Committed Monthly Recurring Revenue (CMRR) by Reducing Churn

  • Implement loyalty programs: Develop and introduce loyalty programs that reward long-term customers. This encourages them to stick around and reduces the likelihood of churn.
  • Enhance customer service: Ensure your customer service is accessible, responsive, and efficient. A positive service experience can significantly increase customer satisfaction and retention.
  • Maintain pricing transparency: Be clear and upfront about your pricing and what each package includes. This transparency helps to manage customer expectations and prevents dissatisfaction.
  • Set realistic expectations: Clearly communicate what your customers should expect from your service or product. Accurate and honest descriptions help prevent misunderstandings and potential churn.
  • Correct misconceptions about churn: Educate your team and communicate with your customers that high churn rates are harmful. Work together to improve product satisfaction and service delivery, aiming to maintain a stable customer base for long-term success.

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