Committed Monthly Recurring Revenue CMRR

Based on our analysis of hundreds of SaaS companies, committed Monthly Recurring Revenue (CMRR) captures what MRR alone misses—the future revenue already locked in through signed contracts. While MRR shows current active subscriptions, CMRR includes signed deals pending implementation, scheduled expansions, and known upcoming churn to give a more accurate forward-looking view. Enterprise SaaS companies with long implementation cycles often see 20-40% gaps between MRR and CMRR because signed deals take months to go live. Finance teams, investors, and operators who rely solely on MRR make planning decisions blind to imminent changes. This guide explains exactly how to calculate CMRR, when it matters most, and how to use it for accurate forecasting and resource planning.

Understanding CMRR Components

CMRR builds on MRR by adding future commitments and subtracting known losses. Four components create the complete picture of committed recurring revenue.

Current Active MRR

Start with your standard MRR calculation—all currently active, paying subscriptions normalized to monthly value. This is your baseline: revenue you're collecting right now from live customers. Annual contracts should be divided by 12 for the monthly equivalent.

Signed Bookings Not Yet Live

Add signed contracts that haven't started billing yet. A $60K annual deal signed in October starting January 1 adds $5K to your CMRR now, even though MRR shows $0 from that customer. This captures the implementation pipeline.

Scheduled Expansions

Include committed upgrades and expansions with defined start dates. A customer committed to adding 50 seats next quarter contributes to CMRR immediately. Only include contractually committed expansions, not pipeline opportunities.

Known Churn and Contractions

Subtract revenue from customers who have canceled or downgraded with future effective dates. A customer canceling 60-day notice reduces CMRR now, even though they're still paying. This prevents surprises in future MRR.

The CMRR Formula

CMRR = Current MRR + Signed Not Live + Scheduled Expansions - Known Churn - Known Contractions. Track each component separately for clear visibility into what's driving CMRR changes.

CMRR vs MRR: When Each Matters

MRR and CMRR serve different purposes. Understanding when to use each prevents planning errors and miscommunication with stakeholders.

MRR for Current State

MRR accurately represents what you're billing right now. Use MRR for: current period reporting, historical trend analysis, calculating run-rate revenue, and month-end financial snapshots. MRR is backward-looking—it tells you where you are.

CMRR for Future Planning

CMRR projects where you're headed based on commitments. Use CMRR for: resource planning, hiring decisions, capacity planning, budget forecasting, and investor updates on trajectory. CMRR is forward-looking—it tells you where you're going.

The Gap Between Them

Large MRR-CMRR gaps indicate significant near-term changes. CMRR > MRR means growth is coming (implementations pending). CMRR < MRR means contraction is coming (churn notices received). The gap size and direction matter.

Enterprise vs SMB Relevance

Enterprise SaaS with long sales cycles and implementation periods benefits most from CMRR. SMB SaaS with instant activation sees minimal MRR-CMRR gaps. If customers go live within days of signing, MRR and CMRR effectively equal.

Planning Insight

Plan resources against CMRR, not MRR. If you have $100K MRR but $150K CMRR, you need infrastructure and support capacity for $150K worth of customers, even though you're not billing that yet.

Calculating CMRR Accurately

Accurate CMRR requires clear definitions, consistent data sources, and proper timing for each component. Common errors create significant distortions.

Defining "Signed"

Only include truly committed revenue—executed contracts, not verbal agreements or high-probability pipeline. The definition should be: contract signed by both parties with defined terms and start date. Handshake deals aren't committed.

Timing and Effective Dates

Track effective dates for all changes: when does the new contract start? When is the expansion effective? When does the cancellation take effect? CMRR calculation date determines which future changes to include.

Pro-Rating Partial Periods

When changes happen mid-month, decide whether to pro-rate or round. A contract starting mid-month might contribute half-month CMRR or full-month depending on your methodology. Be consistent across all components.

Data Source Integration

CMRR requires combining billing data (current MRR) with CRM data (signed deals) and customer success data (churn notices). Ensure data flows between systems and updates regularly. Stale signed deal data creates inaccurate CMRR.

Validation Check

At month end, prior month's CMRR should approximately equal current month's MRR (assuming accurate predictions). Track this reconciliation to validate your CMRR methodology accuracy.

Common CMRR Calculation Mistakes

Several errors commonly distort CMRR calculations, usually by including uncommitted revenue or missing committed changes. Awareness prevents these mistakes.

Including Pipeline as Committed

Deals in late-stage pipeline aren't committed until signed. Even 90% probability deals shouldn't count as CMRR—they're still at risk of not closing. Only include executed contracts with defined start dates.

Missing Pending Cancellations

Customers who have given cancellation notice but are still paying must be subtracted from CMRR. Missing these creates artificially high CMRR that crashes to lower MRR when cancellations take effect.

Double-Counting Renewals

Standard renewals without expansion don't change CMRR—the customer continues paying the same amount. Only count renewal-related CMRR if there's an upgrade or if the contract was at risk and was successfully renewed.

Stale Implementation Data

Signed deals that have been pending implementation for months may have changed scope or even fallen through. Review implementation pipeline regularly and remove deals that won't materialize.

Audit Process

Monthly: Review all CMRR components. Are signed deals still on track? Have any cancellations been missed? Has implementation timeline changed? Regular audits keep CMRR accurate.

Using CMRR for Business Planning

CMRR's forward-looking nature makes it essential for planning decisions that depend on future revenue state rather than current state.

Hiring and Capacity Planning

Customer success teams, support staff, and infrastructure should scale to CMRR, not MRR. If 20 customers are in implementation, you need capacity to support them when they go live. Plan ahead based on CMRR trajectory.

Cash Flow Forecasting

CMRR translates to future cash collections (with typical collection timing). Budget operating expenses against expected CMRR-driven cash inflows, not current MRR. This prevents cash crunches during growth periods.

Board and Investor Reporting

Present both MRR (current state) and CMRR (committed trajectory) to give complete picture. The MRR-CMRR gap shows near-term direction. Growing CMRR-MRR gap with strong signed deals tells a positive story.

Sales Team Quota Setting

Consider CMRR when setting quotas. A rep with $50K MRR and $100K CMRR from implementations has effectively sold $50K more than a rep with $50K MRR and no pending implementations.

Strategic Value

CMRR gives 60-90 day visibility that MRR alone cannot provide. For businesses with implementation cycles, this visibility is essential for avoiding staffing mismatches and cash flow surprises.

CMRR Tracking and Reporting

Effective CMRR tracking requires systems that capture commitment data and present it alongside MRR for complete revenue visibility.

Component-Level Tracking

Track each CMRR component separately: Current MRR, Signed Not Live, Scheduled Expansions, Known Churn. This breakdown reveals what's driving CMRR changes and where forecasting accuracy issues exist.

Time-Series CMRR Projections

Project CMRR by month based on known effective dates. Show when signed deals will become MRR, when expansions will hit, and when churn will impact. This creates a revenue timeline for planning.

CMRR-to-MRR Reconciliation

Track how accurately prior CMRR predicted actual MRR. If you consistently over- or under-predict, adjust methodology. This feedback loop improves forecasting accuracy over time.

Cohort-Based CMRR Analysis

Track CMRR by sales cohort, deal size, or segment. Do enterprise deals have longer time-to-live? Do certain reps' deals fall through more often? Cohort analysis improves CMRR accuracy and reveals sales patterns.

Dashboard Essentials

Key CMRR metrics: Current CMRR, MRR-CMRR Gap, Signed Not Live Pipeline, Known Future Churn, CMRR by expected go-live month, CMRR forecast accuracy (predicted vs actual).

Frequently Asked Questions

Should I report CMRR or MRR to investors?

Report both with clear distinction. MRR shows current billing reality; CMRR shows committed trajectory. Investors want to see the gap and understand what drives it. A large positive gap (CMRR > MRR) with strong implementation pipeline is a positive signal.

How far into the future should CMRR extend?

Include all committed changes with defined effective dates, typically 60-180 days. Beyond that timeframe, even signed deals become less certain. Some companies report "Near-term CMRR" (60 days) and "Extended CMRR" (90-180 days) separately.

How do I handle at-risk renewals in CMRR?

Don't pre-emptively deduct at-risk renewals from CMRR—they haven't canceled yet. However, track at-risk accounts separately and note them in CMRR commentary. Only subtract when you receive formal cancellation notice.

Should usage-based revenue be included in CMRR?

Include minimum committed usage or subscription base in CMRR. Variable usage above minimums is inherently uncommitted and shouldn't be in CMRR. For pure usage-based models, CMRR has limited applicability since little is truly committed.

What if a signed deal falls through before going live?

Remove the deal from CMRR as soon as you learn it won't proceed. Track "bookings fall-through rate" to improve future CMRR accuracy. If deals frequently fall through, your CMRR overstates reality.

How does CMRR relate to ARR and CARR?

CMRR × 12 = CARR (Committed Annual Recurring Revenue). ARR = MRR × 12. CARR and CMRR are forward-looking; ARR and MRR are current-state. Use the same logic for annual metrics, just multiply monthly values by 12.

Disclaimer

This content is for informational purposes only and does not constitute financial, accounting, or legal advice. Consult with qualified professionals before making business decisions. Metrics and benchmarks may vary by industry and company size.

Key Takeaways

CMRR provides the forward-looking revenue visibility that MRR alone cannot deliver. For SaaS businesses with implementation cycles, long sales processes, or significant pending changes, CMRR is essential for accurate planning and forecasting. Calculate CMRR by adding signed bookings and scheduled expansions to current MRR, then subtracting known churn and contractions. Use CMRR for resource planning, cash flow forecasting, and stakeholder communication about trajectory. QuantLedger tracks both MRR and CMRR from your Stripe and CRM data, automatically incorporating new bookings and pending changes to give you accurate committed revenue visibility.

Natalie Reid