Subscription Metrics

Subscription metrics exist because recurring revenue businesses work differently from traditional ones. You don't just track sales. You track how revenue arrives, grows, shrinks, and disappears on a rolling basis. The metrics below form the core of any subscription dashboard.

Revenue metrics

Monthly recurring revenue (MRR) is the starting point. It's your total monthly subscription revenue from active customers. Annual recurring revenue (ARR) is MRR times 12, used for annual planning and investor reporting. For a detailed look at when each is more useful, see ARR vs MRR.

The movement metrics underneath MRR tell the real story. Net new MRR captures your true month-over-month trajectory. Expansion MRR shows whether existing customers are growing. Contraction MRR shows where they're shrinking. Subscription revenue as a whole excludes one-time fees, giving you the predictable base that drives valuation.

Churn and retention

Churn rate measures what percentage of customers or revenue you lose each period. Retention rate is its inverse. Put simply: track both at the customer level and the revenue level. A company losing 50 small accounts and zero enterprise deals looks very different depending on which metric you're reading.

Net revenue retention (NRR) wraps churn and expansion into a single number. Above 100% means existing customers are generating more revenue than last period. Gross revenue retention (GRR) strips out expansion to show pure stickiness.

Both increasingly appear in investor due diligence.

Payment health

Most subscription dashboards stop at churn rate and call it done. That misses the payment layer underneath. Payment failure rate tells you what percentage of renewal charges fail on the first attempt. Industry averages sit at 5-10%. Involuntary churn tracks the subset of churn caused by payment failures rather than deliberate cancellations.

We've found that separating involuntary from voluntary churn changes how teams prioritise. Involuntary churn is a mechanical problem with a mechanical solution: dunning. Voluntary churn requires product work. Lumping them together hides where the quick wins are.