MRR customer waterfall

Overview

The MRR customer waterfall report provides a detailed, granular view of monthly recurring revenue (MRR) broken down by individual customers over time. This report is essential for understanding the dynamics of your recurring revenue, allowing finance and sales teams to identify trends in customer growth, contraction, and churn. It helps in assessing the health of your customer base and forecasting future revenue.

Understanding the report

The MRR customer waterfall is presented as a table, with customer names listed as rows and months as columns . Each cell in the table displays the MRR generated by a specific customer for a given month. The report spans multiple months, allowing for a historical analysis of each customer's contribution to your total MRR.

Key components and definitions

• Customer name: This column lists the names of individual customers or aggregated customer segments. For example, Customer 1, Customer 2, and [All] Usage Savvy Customer are shown in the report.
• Monthly columns: Each column represents a specific month (e.g., August 2024, September 2024, June 2025). The values within these columns represent the monthly recurring revenue attributed to each customer for that particular month.
• Individual customer rows: Each row tracks the MRR generated by a single customer across the selected months. By observing the changes in MRR values across these months, you can identify if a customer's subscription has expanded (increased MRR), contracted (decreased MRR), or remained stable.
  • Example: Customer 1 shows an MRR of 46,566.33 in January 2025, which slightly fluctuates to 47,962.01 by June 2025.
• Aggregate rows: Rows like [All] Usage Savvy Customer represent the combined MRR of a specific customer segment or a total for all customers. These rows provide a high-level summary for a group, allowing for an aggregated view of their MRR performance.
  • Example: [All] Usage Savvy Customer consistently shows an MRR around 443.85 for most months, indicating a stable recurring revenue from this segment.

How to use and interpret the report

The MRR customer waterfall is a powerful tool for various analyses:

• Identify customer churn and retention: A sudden drop to zero or a significant decrease in MRR for a customer indicates churn or contraction. Conversely, consistent MRR or an increase signifies retention and expansion.
• Analyze customer expansion and contraction: Track individual customer rows to see how their MRR changes over time due to upsells, cross-sells, downgrades, or cancellations.
• Understand overall MRR trends: By looking at the aggregate rows, you can quickly grasp the overall MRR movement for specific customer segments or your entire customer base.
• Improve forecasting: Historical MRR data by customer provides a solid foundation for more accurate revenue forecasting and budgeting.
• Identify high-value customers: Customers with consistently high MRR values are easily identifiable, allowing you to focus on nurturing these relationships.

In essence, the MRR customer waterfall provides the granular detail needed to truly understand the health and trajectory of your recurring revenue at the customer level, empowering data-driven decisions for growth and retention.