Common events that affect Monthly Recurring Revenue (MRR) totals

The four major ways to change Monthly Recurring Revenue (MRR) are through new subscriptions, expansions, contractions, and churn.

New Subscriptions

This occurs when a new or existing customer starts a new active subscription, or upgrades from a free subscription to a paid subscription.

Expansion

This occurs when an existing paid subscription is upgraded or modified to increase its MRR. This can happen by adding or changing a plan, increasing the quantity, or lowering a discount.

Contractions

This occurs when an existing paid subscription is downgraded or modified to decrease its MRR (to a non-zero amount). This can happen by removing or changing a plan, lowering the quantity, or increasing a discount.

Churn

This occurs when an existing paid subscription is either canceled, downgraded to a free subscription, or becomes delinquent. Note that when the trial ends on a new subscription for a customer without a saved payment method, the subscription briefly moves from status=trialing to status=active before the first invoice fails payment, and the subscription becomes status=past_due.

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