MIMF

FORMULA LIBRARY · SUBSCRIPTION BUSINESS METRICS

What do founder revenue metrics actually mean?

MRR, ARR, churn, and collections answer different questions. This guide publishes the formulas, inclusions, exclusions, and interpretation boundaries used by the synthetic Founder Revenue Lab.

Current MRR
$697 in the fixture
Run-rate ARR
$8,364 in the fixture
Net collected
$1,548 in the fixture
Gross MRR churn
24.9% in the fixture
Real accounts
None
Fixture license
CC0
01

Monthly recurring revenue

MRR is the sum of active recurring subscription value normalized to one month. A $1,200 annual plan contributes $100 of MRR. Trialing, one-time, and canceled charges are excluded.

Fixture formula: $99 + $249 + $100 + $249 = $697 current MRR.

02

Annual recurring revenue

Run-rate ARR equals current MRR multiplied by 12. In the fixture, $697 × 12 = $8,364.

ARR is a forward-looking run rate. It is not recognized revenue, cash collected, a forecast guarantee, or a GAAP measure.

03

Net new MRR

Net new MRR equals new MRR plus expansion MRR minus contraction MRR minus churned MRR.

Fixture formula: $249 + $150 - $0 - $99 = $300 net new MRR.

04

Revenue churn

Gross MRR churn equals churned MRR divided by starting MRR for the period. The fixture uses $99 ÷ $397 = 24.9%.

Customer churn is a different measure: canceled customers divided by customers active at the beginning of the period. Do not substitute one for the other.

05

Collections and refunds

Net collected cash equals successful charges minus refunds. The fixture uses $1,647 - $99 = $1,548.

Collections are not the same as MRR. One is payment activity; the other normalizes recurring subscription commitments.

06

Failed payments and forecasts

Failed payments are a recovery and churn-risk signal. A failed payment is not automatically a churned subscription.

Forecasts are estimates built from assumptions. They should identify their horizon, inputs, and uncertainty instead of presenting one number as a promise.

SOURCE HIERARCHY

Verify at the origin.

These definitions are educational and designed for reproducibility. Accounting policies, billing models, and reporting requirements differ. The guide is not accounting, tax, legal, or investment advice.