What are common reasons for a decrease in MRR?

Typical reasons for a decrease in MRR include the following:

  • Churned subscriptions
  • Account decreases a subscription
  • Subscription downgrade
  • Coupon is applied to a charge/charges (assuming Analytics settings include coupon discounts) 
  • Credit is applied is applied to a charge/charges
  • A subscription is refunded 

One last note also that may surprise you is when credits are given very short durations. Charges with no end date, or an end date the same as the start date, are excluded from MRR automatically.

In order to do calculate the "monthly value" of a charge, we take an amount and a duration. A charge's duration is defined by the time between its start date and end date. The "monthly value" is the charge's amount divided by its duration, converted to a monthly value. This means that if a charge is unknowingly given a short duration (such as 5 minutes, or 1 hour), then it becomes a huge negative MRR value and can impact the report after the monthly conversion occurs.

For example, if a charge's value is -$10.00 and its duration is 0.000114155251141553 of a month (5 minutes divided by 43800 minutes in a month), then its "monthly value" is about -$87,600.

If you believe this is the case for your MRR amount on a given date, you can export the "Adjustments" or simply "Invoices" (legacy report) and filter for type = credit. From here compare either the adjustment_start_date with adjustment_end_date, or line_item_start_date with line_item_end_date to calculate the duration.

Note that this is not limited to only decreases in MRR, and can also contribute to large positive MRR spikes if the start_date and end_date are not properly set for the correct timeframe on charges (Example: Either 0 duration (same start_ and end_ date) or no end_date can be set for line items not intended to be included in MRR).