Software Growth

CMRR (Committed monthly recurring revenue)

CMRR is a forward-looking version of MRR that adds signed but not yet live contracts and known upgrades, and subtracts known cancellations and downgrades.

Plain MRR looks backward. It tells you what is being billed right now. If you just signed a customer who goes live next month, or a big account has given notice, MRR does not know yet. CMRR fixes that by adjusting current MRR for changes you already know are coming.

How to calculate CMRR

Baremetrics gives the formula as MRR plus new bookings, churn, downgrades and upgrades, where churn and downgrades are negative numbers. Written out:

Say you have $20,000 of MRR today. Three contracts worth $3,000 a month are signed and will start billing next month. Two customers have committed to upgrades worth $500. One has asked to downgrade by $400, and two have given notice for $1,200 combined.

CMRR is $21,900. If you only looked at MRR you would think you are at $20,000 and miss both the gain and the loss on the way.

Where it comes from

Bessemer's cloud metrics guide calls CMRR the purest forward view of steady-state revenue. It counts recognized recurring revenue, signed contracts going into production, and anticipated churn. The same guide recommends reporting ARR externally and treating CMRR as the internal planning number. Note it also warns that TCV and bookings can be misleading and easy to manipulate, which is why CMRR counts only recurring, committed amounts.

What counts as committed

  • Counts: signed contracts with a start date, notified cancellations, scheduled upgrades or downgrades, and contractual price steps.
  • Does not count: pipeline, verbal agreements, trials, one-time fees, and uncertain renewals you merely expect to lose. Predicted churn is a forecast, not a commitment, unless the customer has told you.

CMRR vs MRR vs ARR

MRR is what was billed. CMRR is what will be billed once committed changes take effect. ARR is MRR times 12, and committed ARR is CMRR times 12. CMRR is also different from bookings, which measure total contract value signed, not monthly recurring amounts.

When a small SaaS needs it

If everyone pays by card on monthly plans, MRR and CMRR are nearly identical because cancellations and upgrades take effect immediately. CMRR starts to matter when you have:

  • Annual or multi-month contracts with start dates in the future.
  • A sales-assisted motion with a lag between signature and go-live.
  • Customers who give notice ahead of a contract end.

It is also the figure a lender or buyer wants when they ask what the business is really at. Keep it in a simple sheet: current MRR, then one row per known change with its effective date.

Sources

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