Revenue Glossary

Browse 49 revenue terms defined in plain English, from the cultural dictionary of computing.

49 Revenue Terms

Agency Model
A business model where the company primarily earns revenue by providing services, expertise, or project work for clients rather than selling a standalone...
Annual Contract Value
The yearly value of a customer contract, excluding one-time fees unless a company defines it otherwise. ACV is often used to compare deal sizes in enterprise...
Annual Plan
A subscription plan billed yearly rather than monthly, often with discounting in exchange for longer commitment and better cash collection. Annual plans can...
Annual Recurring Revenue
The normalized yearly value of recurring subscription revenue, often used as a headline growth metric for SaaS businesses. ARR excludes one-time services and...
ARR
Annual Recurring Revenue — the value of contracted recurring revenue normalized to a one-year period. The North Star metric for SaaS businesses. Not to be...
ARR
Annual Recurring Revenue — the annualized value of active subscriptions, the single most important metric for SaaS businesses. Calculated by multiplying MRR...
Bookings
The total value of signed customer contracts or committed sales in a period, regardless of when the revenue will be recognized. Bookings matter because they...
Business Model
The fundamental way a company creates, delivers, and captures value, including who the customer is, what they buy, and how the company makes money. A startup...
CLV
Customer lifetime value, an estimate of the total value a customer generates over the duration of the relationship, often net of churn and margin assumptions....
Committed Revenue
Revenue contractually committed by customers, typically through signed agreements, even if all of it has not yet been recognized in accounting. It is useful...
Contract Value
The total monetary value of a customer contract, which may span multiple years and include recurring and non-recurring components. Teams often distinguish it...
Cross-Sell
To sell additional related products or features to an existing customer beyond their initial purchase. Cross-selling is a common expansion strategy in...
Customer Expansion
Growth in revenue or usage from existing customers through seat increases, added products, higher tiers, or larger deployment scope. For many SaaS companies,...
Customer Lifetime Value
An estimate of the total revenue or gross profit a customer will generate over the full duration of the relationship. It is a core unit-economics metric when...
Deal Size
The monetary value of a specific sale or contract, often used in averages to describe commercial motion. Deal size shapes sales process, staffing, and pricing...
Direct Sales
A go-to-market model where the company sells to customers through its own sales team instead of relying mainly on partners or self-serve channels. It is common...
Dollar Retention
A revenue retention metric showing how recurring revenue from a customer cohort changes over time after accounting for churn, contraction, and sometimes...
Expansion Revenue
Additional recurring revenue generated from existing customers through upgrades, added seats, usage growth, or additional products. Expansion revenue is a...
Forward Revenue
Expected future revenue over an upcoming period, often used in planning or valuation multiples rather than historical reporting. Forward revenue matters most...
Gross Retention
The percentage of recurring revenue retained from an existing customer base over time, excluding the positive effect of expansion. Gross retention isolates how...
Gross Revenue
Total revenue before certain deductions such as refunds, discounts, or partner payouts, depending on context and accounting treatment. Teams use the term when...
Growth Rate
The speed at which a business metric such as revenue, users, or bookings increases over time. Growth rate is simple to state but only meaningful when paired...
Key Account
A strategically important customer account that represents significant revenue, influence, or future expansion potential. Key accounts often receive more...
Lifetime Revenue
The total revenue generated by a customer or cohort across the entire relationship. It is related to lifetime value but typically focuses on topline revenue...
LTV
Short for lifetime value, the estimated total value a customer produces over the duration of the relationship. LTV is often paired with CAC to judge whether a...
Metered Billing
A billing model where customers are charged based on measured usage such as API calls, seats consumed, storage, or compute time rather than only through flat...
Monthly Recurring Revenue
The normalized monthly value of recurring subscription revenue, often used as a core operating metric in SaaS businesses. MRR helps teams track momentum more...
MRR
Short for monthly recurring revenue, the normalized monthly value of recurring subscription revenue. MRR is one of the most widely tracked startup metrics...
Net MRR
Monthly recurring revenue after accounting for expansion, contraction, and churn effects, rather than just the starting base. Teams use net MRR to understand...
Net New ARR
The increase in annual recurring revenue over a period after adding new business and expansion while subtracting churn and contraction. It is a cleaner growth...
Net Retention
A measure of how much revenue from an existing customer base is retained over time after accounting for churn, contraction, and expansion. Net retention above...
Net Revenue
Revenue remaining after deducting items such as refunds, discounts, returns, or partner payouts as defined by the business. It provides a more realistic view...
Net Revenue Retention
The percentage of recurring revenue retained from an existing cohort over time after factoring in churn, downgrades, and expansion. Net revenue retention is a...
NRR
Short for net revenue retention, the percentage of recurring revenue kept from an existing customer base after churn, contraction, and expansion. It is one of...
One-Time Revenue
Revenue that does not recur predictably, such as setup fees, implementation work, hardware sales, or one-off consulting. It can help cash flow but usually...
Outcome-Based Pricing
A pricing model where fees depend partly or fully on the results the customer achieves, such as savings delivered, revenue generated, or performance targets...
Pre-Revenue
Describing a company that has not yet generated meaningful revenue from customers. Pre-revenue status is common early on, but investors then rely more on team,...
Pricing Model
The overall structure of how a company charges customers, such as subscriptions, usage-based billing, per-seat pricing, or transaction fees. A strong pricing...
Recurring Revenue
Revenue expected to repeat predictably over time through subscriptions, renewals, or contractual repeat billing. Recurring revenue is especially valuable...
Revenue Churn
The amount of recurring revenue lost over time from customers leaving or downgrading, usually expressed as a percentage. Revenue churn can look very different...
Revenue Run Rate
An annualized or periodic projection based on current revenue performance, used as a shorthand estimate of what revenue would look like if the present pace...
Seat-Based Pricing
A pricing model where customers pay based on the number of users or seats with access to the product. It is simple to understand and forecast, though it may...
Stacking
Layering multiple incentives, products, channels, or revenue streams on top of one another to increase leverage or value capture. In startup conversation it...
Subscription Model
A revenue model in which customers pay on a recurring basis for continued access to a product or service. Subscription models shift the business from one-time...
Subscription Revenue
Revenue generated from recurring subscription payments rather than one-time transactions. Subscription revenue is highly valued because it creates visibility...
Top Line
Revenue, especially as the top figure on an income statement before costs and profit are considered. Startup discussions often contrast top-line growth with...
Total Contract Value
The full value of a customer contract across its entire term, including recurring and one-time components as defined by the company. Total contract value is...
Under-Monetized
Generating less revenue than the underlying usage, value delivered, or market willingness to pay would support. A product can be under-monetized because...
Upsell
To sell a customer a higher-priced version, larger package, or more capable offering than what they currently use. Upselling works best when it reflects added...

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