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WELCOME TO ISSUE NO #063

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📆 Today’s Rundown

Hey 👋, hope you had a great week! In the last issue, we discussed why tracking Workforce Planning and Management Metrics matter, and now we are moving with the first topic from Revenue, ARR and MRR content.

Let’s talk about ⬇️

CARR vs CMRR: A SaaS Guide to Committed Revenue

Most SaaS founders think ARR and MRR are enough to measure the health of their business.

But here’s the truth: they only give you the surface-level view. They tell you what’s happening right now — but not what’s already in the pipeline, not what’s leaking out, and definitely not what’s guaranteed to hit your bank.

After working with dozens of SaaS founders as a fractional CFO, I can tell you: the real clarity comes when you layer in CARR and CMRR.

Let’s break this down with 5 metrics every SaaS leader should track (and how they work together).

TL;DR

1️⃣ ARR (Annual Recurring Revenue)

2️⃣ MRR (Monthly Recurring Revenue)

3️⃣ CARR (Committed Annual Recurring Revenue)

4️⃣ CMRR (Committed Monthly Recurring Revenue)

5️⃣ Churn (the silent killer)

1️⃣ ARR (Annual Recurring Revenue)

The goal of ARR is simple: show your 12-month recurring revenue from active contracts.

Example:

• You have 100 customers paying $1,200/year → ARR = $120,000.

That looks great… but there’s a catch. ARR only counts contracts that have already started. If you just closed a big deal that begins in two months, it won’t show up here.

That’s why you can’t stop at ARR.

2️⃣ MRR (Monthly Recurring Revenue)

MRR zooms in on recurring revenue this month. It’s your growth speedometer.

Example:

Same 100 customers paying $100/month → MRR = $10,000.

It helps you track momentum, but just like ARR, it ignores closed-won contracts that haven’t gone live. It’s like looking at your current gas tank without accounting for the fuel truck already on its way.

3️⃣ CARR (Committed Annual Recurring Revenue)

This is where things get powerful.

Formula:
CARR = ARR + New Bookings + Upsells – Downgrades – Churn

Example:

• ARR: $120,000

• New Bookings: $30,000

• Upsells: $10,000

• Churn: –$15,000

• Downgrades: –$5,000
  = CARR = $140,000

Why it matters: Unlike ARR, CARR counts revenue as soon as a contract is closed-won — even if it hasn’t started yet.

If you want to know the real exit run-rate for your SaaS? CARR is the number investors care about.

4️⃣ CMRR (Committed Monthly Recurring Revenue)

Same idea, but at a monthly scale.

Formula:
CMRR = MRR + New Bookings + Upsells – Downgrades – Churn

Example:

• MRR: $10,000

• New Bookings: $2,000

• Upsells: $1,000

• Churn: –$1,500
  = CMRR = $11,500

Why it matters: If your SaaS runs monthly contracts, CMRR gives you the clearest view of future inflows and outflows. It helps you plan cash flow, scenario plan, and see exactly where growth is coming from (or being lost).

5️⃣ Churn (the silent killer)

High churn can erase growth faster than any new deal can replace it.

Example:

• Say you close $30K in new deals this quarter. Sounds amazing.

• But if $25K churns out? Net growth = just $5K.

That’s why investors don’t just ask “what’s your ARR?” They ask:

• What’s your churn?

• How does churn affect your CARR and CMRR?

Because that’s what reveals if your growth is real or a treadmill.

Need clarity on your financial strategy or cash flow optimization?

I'm Aleksandar, fractional CFO at Fiscallion, where we help founders like you achieve financial clarity, streamline reporting, and build investor-ready forecasts.

Ready to level up your finances?

🚀 Why CARR & CMRR matter more than ARR & MRR

ARR and MRR are rear-view metrics: they show you where you are now.
CARR and CMRR are windshield metrics: they show you what’s coming.

Here’s what you unlock when you track them:

• Forecasting accuracy: Plan cash inflows/outflows with confidence.

• Board & investor trust: Show a true picture of guaranteed revenue.

• Retention insights: Spot churn trends before they spiral.

• Growth levers: See if expansion revenue is outpacing downgrades.

The bottom line?
If you stop at ARR and MRR, you’re only seeing half the story.
CARR and CMRR reveal what you can actually bank on.

So here’s my challenge to you:
📊 Run the formulas this week for your own SaaS.
Compare your ARR/MRR vs CARR/CMRR.

If the gap is big, dig into why. It could be a churn issue, a sales cycle issue, or an onboarding delay. Whatever it is — it’s a clue.

Chat soon

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