Why Is My MRR Decreasing, and What Causes Unexpected Spikes?

Typical reasons for a decrease in Monthly Recurring Revenue (MRR) include:

• Churned subscriptions

• A decrease in the number of subscriptions on an account

• A subscription downgrade

• A coupon is applied to a charge

• A credit is applied to a charge

• A subscription is refunded

A less obvious reason for a large decrease—or increase—in MRR can be caused by charges with very short or zero durations.

The Impact of Short Duration Charges on MRR

Charges with a very short or zero duration can cause huge negative or positive spikes in your MRR. This happens because the MRR calculation is based on a charge's monthly value, which is determined by a charge's amount divided by its duration.

For example, if a credit's value is -$10.00, and its duration is 0.000114 of a month (5 minutes), its "monthly value" is approximately -$87,600. This disproportionate monthly conversion can severely impact your MRR report.

Charges with no end date, or an end date that is the same as the start date (zero duration), are automatically excluded from MRR unless the dates are properly set.

How to Troubleshoot: If you believe this is the case for an MRR spike, you can export your Adjustments or Invoices (legacy report) and filter for type = credit. From there, compare the adjustment_start_date with adjustment_end_date, or the line_item_start_date with line_item_end_date to calculate the duration.