How are my subscription metrics calculated? How are my subscription metrics calculated?

How are my subscription metrics calculated?

How is my ARPU calculated?

ARPU stands for average revenue per user. It’s a way to understand the value of each of your users for a set period of time. ARPU is different from a customer’s lifetime value (LTV) in that ARPU measures the value of the customer over a defined period of time, while LTV measures the value of the customer over their entire lifecycle.

ARPU is calculated by dividing your recurring revenue over a defined time period by the number of active users. Typically, ARPU is measured on a monthly basis.

ARPU = MRR / Number of active users

ARPU is important because it can help you better understand your customer base and pricing strategy. For example, if your ARPU is too low, that might be an indicator that you’re underpricing your products and services.

How is my invoiced MRR calculated?

Your invoiced MRR indicates the total amount of recurring revenue your business has invoiced to your customers during your monthly billing period, regardless of what is actually paid. It is computed directly from subscription invoice lines. Although invoiced MRR is calculated daily, the last month is not represented until it is complete. 

Your invoiced MRR lets you know how much revenue you’re invoicing each month. This can help you understand how your business health is trending.

Invoiced MRR = Paid MRR + Unpaid MRR

How is my paid realized MRR calculated?

Realized revenue is a measure of everything that is earned and has been received in your company's bank account. It does not include invoiced revenue that has not been fully paid yet.

For example, If a customer has a $1200 annual subscription they are paying in $100 monthly installments, and the combined payments of January and February is only $100 instead of $200 because their card failed, your paid realized revenue would be $100, while your invoiced revenue would be $200. 

How is my unpaid MRR calculated?

Unpaid MRR indicates the difference between your invoiced MRR and your paid realized MRR figures. Ideally, unpaid MRR should be 0. This would mean that all the customers that have been invoiced are paying for their subscriptions in full. A high unpaid MRR indicates that your business can improve its process for collecting payments from customers.

How is my MRR growth calculated?

Your MRR growth summarizes how much your MRR has grown from a set period in the past to the current period. MRR growth indicates your company’s forward momentum, market traction, and market expansion by tracking how your MRR changes over time. It's a helpful indicator of your company’s future growth and can help you determine what’s working and what’s not.

MRR growth is calculated by subtracting your net MRR in the current period from your net MRR in the previous period and dividing that figure by the net MRR in the previous period. Then, it's multiplied by 100 to get a percentage.

MRR growth = 100 x (Net MRR in current period - Net MRR in previous period) / (Net MRR in previous period)

How does Capchase analyze my subscriptions?

Subscriptions can vary based on your type of product and subscription structure. We take into account all your product subscriptions to give you a holistic view of your user base.

You can find a detailed breakdown of new, reactivated, existing, and churned subscriptions.

How is my subscription growth calculated?

Subscription growth is an indication of how much your active subscriptions have grown or decreased over a set period of time. This metric tells you how your subscription base is changing over time.

Subscription growth is calculated by subtracting the number of subscriptions in the current period from the number of subscriptions in a previous period and dividing that figure by the number of subscriptions in the current period.  Then, it's multiplied by 100 to get a percentage.

Subscription growth = 100 x (Total subscriptions in current period - Total subscriptions in a previous period) / (Total subscriptions in a previous period)

How does Capchase analyze my net MRR churn?

Net churn reflects the percentage of overall recurring revenue lost in a specific period after factoring in upgrades and expansions. This is calculated on a monthly basis through the following expression:

Net MRR churn = Churned MRR + Contraction MRR - Expansion MRR

This metric helps to give you a holistic picture of what revenue changes you can expect from your current number of subscriptions.

 

You can see some of the metrics from your last business' Underwritings directly on your Credit Review dashboard. Here you can also request a new Underwriting to get the latest updated data. Learn more about the dashboard here.

If you have any questions, don’t hesitate to send us a message at support@capchase.com.