ARR
Annual recurring revenue. A normalized annual view of recurring subscription or contract revenue, based on agreed definitions.
Glossary
Transaction revenue terms in plain English.
These are practical definitions. Before analysis begins, the people involved agree how to treat revenue, cohorts, currencies, dates, and conflicting source files.Revenue terms
Customer-revenue terms in plain language.
Clear definitions prevent two people from using the same word for different numbers.MRR
Monthly recurring revenue. A monthly recurring revenue run-rate used when the business tracks subscription revenue monthly.
ARR bridge
A movement schedule from beginning ARR to ending ARR, typically showing new logos, expansion, cross-sell, downsell, and churn.
GRR
Gross revenue retention. Revenue retained from the starting customer base before giving credit for expansion. It isolates base durability.
NRR
Net revenue retention. Revenue retained from the starting customer base after including expansion and cross-sell, then subtracting downsell and churn.
Cross-sell
Revenue from an existing customer buying an additional product, module, service line, or revenue category beyond the prior relationship.
Cohort retention
Revenue or logo retention for customers grouped by a shared start period, such as first purchase or contract start.
Customer concentration
How much revenue is generated by the largest customers, often shown as top 5, top 10, or top 20 customer share.
LTV
Lifetime value. An estimate of expected gross-profit contribution from a customer relationship, calculated only when churn, ACV or ARPA, margin, and cohort assumptions are reliable.
CAC
Customer acquisition cost. Sales and marketing cost associated with acquiring customers, used in CAC payback and LTV/CAC analysis when source data supports it.
Logo churn
The percentage or count of customers lost in a period, regardless of revenue size.
Dollar churn
The amount of revenue lost from downsell or churned customers during a period.
Downsell
Revenue contraction from an existing customer that remains active but spends less than before.
Expansion
Revenue growth from an existing customer, often from more seats, usage, contract scope, pricing, or deeper adoption of existing products.
Recurring vs. non-recurring
A split between revenue expected to repeat under contract or usage patterns and one-time services, setup, or project revenue.
Core formulas
The formulas only work after the definitions are agreed.
The formulas are straightforward. The hard part is agreeing which source to use, how customers are grouped, which dates count, and how to handle one-time revenue and exceptions.ARR bridge
Beginning ARR + New + Expansion + Cross-sell - Downsell - Churn = Ending ARR
Used to explain how customer-level recurring revenue moved between periods.
GRR
(Starting ARR - Downsell - Churn) / Starting ARR
Measures base revenue durability before expansion is added back.
NRR
(Starting ARR + Expansion + Cross-sell - Downsell - Churn) / Starting ARR
Measures net retained revenue from the starting customer base after expansion, cross-sell, contraction, and churn.
See the analysis