Practise vocabulary for recurring-revenue reporting: MRR vs ARR, new/expansion/contraction/churned MRR, and the MRR bridge.
0 / 10 completed
1 / 10
ARR is simply MRR multiplied by ___.
Annual Recurring Revenue annualises Monthly Recurring Revenue by multiplying by 12.
2 / 10
Revenue from brand-new customers this period is ___ MRR.
New MRR is recurring revenue added by customers acquired in the period, a component of the MRR bridge.
3 / 10
Extra revenue from existing customers upgrading is ___ MRR.
Expansion MRR captures upsells and seat growth within existing accounts, often the cheapest growth lever.
4 / 10
Revenue lost from downgrades (not full cancellations) is ___ MRR.
Contraction MRR is the partial loss when customers downgrade; full cancellations are churned MRR.
5 / 10
A waterfall showing how starting MRR becomes ending MRR via these components is the MRR ___.
The MRR bridge decomposes the change in MRR into new, expansion, contraction, and churn so stakeholders see the drivers.
6 / 10
Review Comment: Alex left this comment on a PR updating the MRR dashboard:
'The 'Monthly Recurring Revenue' (MRR) calculation seems off. It's currently showing $12,500, but we should be factoring in the new user cohort that joined last month. Can you double-check if the onboarding revenue is being correctly attributed?'
This scenario tests understanding of how MRR is calculated in practice. Alex correctly identifies that the initial calculation doesn't account for new user revenue – a common mistake. The correct answer highlights the inclusion of both new users and upgrades while excluding downgrades to arrive at an accurate MRR figure. Options A and B are too simplistic, while option C introduces ARPU which is a separate metric.
7 / 10
Slack Message: Sarah from Sales sends this message to the engineering team:
'Hey team, MRR for Q3 is projected at $55,000. This represents a 15% increase year-over-year. We're seeing strong adoption of the premium tier!'
This question assesses the ability to interpret a key metric's meaning within a business context. The phrase 'year-over-year' is crucial – it indicates growth compared to the previous period. The correct answer correctly explains what the percentage increase signifies in terms of revenue and customer adoption. Option A defines MRR incorrectly, while options B and D focus on specific aspects rather than the overall meaning of the projection.
8 / 10
PR Description: You're updating the documentation for a new MRR reporting API endpoint. The description includes this:
'This endpoint returns the current MRR value, calculated as: MRR = Sum(New MRR) + Sum(Upgrades) - Sum(Downgrades)'
This tests understanding of the *formula* for calculating MRR. The description clearly states that the calculation incorporates new user revenue, upgrades, and excludes downgrades. Option A is too broad; option B oversimplifies the formula. Option D is incorrect as it refers to historical data, not the current calculation.
9 / 10
Standup Update: During a daily standup meeting, David says:
'We're currently running at an MRR of $38,000. The biggest driver is our enterprise clients – they're contributing around $18,000 this month.'
David's statement provides a key insight into MRR drivers. The correct answer correctly interprets that $38,000 is the *current* MRR figure and highlights the significant contribution from enterprise clients. Options A and D are too general; option B misinterprets 'contributing' as total revenue.
10 / 10
API Response (Example): You receive the following JSON response from an MRR reporting API:
{"MRR": 62500, "NewUsers": 125, "Upgrades": 75, "Downgrades": 25}
This question focuses on interpreting an API response. The JSON provides several key metrics related to MRR calculation. The correct answer correctly identifies that it's a snapshot of these important metrics. Options A and B are too simplistic; option D is incorrect as the API provides detailed information.
What will I learn from the "MRR/ARR Reporting Language" exercise?
Practise vocabulary for recurring-revenue reporting: MRR vs ARR, new/expansion/contraction/churned MRR, and the MRR bridge.
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How many questions are in this exercise?
This set contains 10 multiple-choice questions, each with a detailed explanation shown after you answer.
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Who is this SaaS Metrics exercise for?
This exercise is built for IT professionals and non-native English speakers who need to read, write, and discuss saas metrics topics confidently at work.
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You will see the correct answer highlighted along with a detailed explanation of why it is correct -- so every wrong answer becomes a learning moment, not just a lost point.
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How long does this exercise take to complete?
Most learners finish all 10 questions in under 10 minutes, since each question is answered by clicking a single option.
Where can I find more SaaS Metrics exercises?
See the full SaaS Metrics exercises hub for more vocabulary drills on this topic.
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