How to calculate Normalized Subscription Revenue



Subscription revenue that is split to the months when the service is delivered. The splitting is called ‘normalization’.


Used to calculate Monthly Recurring Revenue (MRR).

Why is it needed:

You may have received subscription revenue in advance.
Normalization prevents these problems:

  • You may think that your SaaS has started to grow faster, when there are more prepayments
  • You may think that your SaaS is doing worse when no revenue gets collected in that month

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