Understanding Key Metrics
What is ARR (Annual Recurring Revenue)?
What is ARR (Annual Recurring Revenue)?
ARR is the total value of recurring revenue normalized to an annual rate. If you have 120,000. This metric shows your annual revenue potential from existing subscriptions.
What is MRR (Monthly Recurring Revenue)?
What is MRR (Monthly Recurring Revenue)?
MRR is your total recurring revenue for a single month. It’s ARR divided by 12, but calculated fresh each month to account for new subscriptions, churn, and upgrades.
What is CARR (Committed Annual Recurring Revenue)?
What is CARR (Committed Annual Recurring Revenue)?
CARR includes both active subscriptions and signed contracts that haven’t started yet. It represents committed revenue that will be recognized in the future.
What is the waterfall methodology?
What is the waterfall methodology?
The waterfall breaks down month-to-month revenue changes: starting MRR, new customers added, upgrades, downgrades, churn, and ending MRR. This shows exactly where revenue is growing or shrinking.
Checking Company-Wide Metrics
Get your entire company’s revenue picture instantly.Example Commands
Viewing MRR Waterfall
See exactly how your monthly recurring revenue changed from month to month. The waterfall typically includes:- Starting MRR: MRR at the beginning of the period
- New Customers: MRR added from new subscriptions
- Expansions: Additional revenue from upgrades or add-ons
- Contractions: Revenue lost from downgrades
- Churn: Revenue lost from canceled subscriptions
- Ending MRR: MRR at the end of the period
The waterfall gives you the clearest picture of what’s driving revenue growth or decline. Use it to identify which areas need attention.
Revenue by Customer
Understand which customers contribute most to your revenue.Example Commands
Revenue by Product
If you offer multiple products or plans, segment your revenue accordingly.Revenue Forecasting
Project future revenue based on current subscriptions and growth trends.Example Commands
Cohort Analysis
Group customers by when they started and see how each cohort performs.Churn and Retention Metrics
Track how well you’re keeping customers and the revenue impact.Net revenue retention accounts for both churn and expansion. A rate above 100% means you’re expanding within existing customers faster than you’re losing them.
Revenue vs Invoicing
Understanding the difference:Revenue vs Invoices
Revenue vs Invoices
Revenue is recurring billing (subscriptions). Invoices are one-time or ad-hoc charges. Ari tracks both separately but can show combined metrics.
How are they combined?
How are they combined?
For total revenue pictures, Ari can show subscriptions + one-time invoices. This gives you a complete financial view.
Exporting Analytics
Save reports for presentations, investor meetings, or deeper analysis.Best Practices
- Review metrics weekly: Stay on top of MRR trends so you catch churn or expansion early
- Understand your waterfall: The waterfall reveals where you’re winning and where you’re losing revenue
- Track cohorts: Customer cohort analysis helps you understand product-market fit and unit economics
- Monitor net revenue retention: This is the strongest indicator of healthy recurring revenue business
- Set revenue targets: Use historical trends and forecasts to set realistic quarterly and annual goals
- Share with team: Post key metrics regularly in Slack to keep teams aligned on progress
Connecting to Business Goals
Use revenue analytics to:- Identify growth areas: See which products or customer segments are expanding fastest
- Catch churn early: Spot trends before they become problems
- Evaluate pricing changes: Measure the impact of price increases or new plans
- Plan hiring: Revenue growth should drive headcount decisions
- Build forecasts: Accurate revenue projections help with financial planning