Why is MRR different from Monthly Recognized Revenue?

Recognized revenue allows you to see the revenue from contracts that have been fulfilled. In subscription metrics, recognized revenue can be much lower than predicted recurring revenue if a large part of the service period has not been completed.

For example, if you have a customer that signs up near the end of the month:

Customer A started a monthly subscription on 29th, August 2018 at 12 pm, and paid $14.99. They have $14.99 MRR on August 29th as we can assume that they will continue to pay that while the subscription is active.

However, Customer A’s recognized revenue for August is only $1.21. This figure represents how much of the subscription has been fulfilled in August. The basic calculation is:

(subscription value / days in the month) x days of service

(14.99 / 31) x 2.5 = 1.21

We calculate the time down to the second to be accurate, so the exact time of day when a customer signs up is taken into consideration.

The rest of the payment will contribute to recognized revenue in September when the service period has been completely fulfilled.

It is possible to change your revenue recognition stratagy within your Chartmogul setting by going to Admin > Data settings > Revenue Recognition. You can read more about the different stratagies here.