What is MRR?
Definition
Monthly Recurring Revenue — the predictable total revenue a subscription business expects to earn each month from all active subscriptions.
Understanding MRR
MRR is the heartbeat metric of subscription businesses. It represents the total monthly income from all subscribers, normalized to a monthly figure. For example, if you have 100 customers paying $10/month and 50 paying $200/year, your MRR would be $1,000 + $833.33 = $1,833.33.
MRR is tracked as New MRR (new customers), Expansion MRR (upgrades), Contraction MRR (downgrades), and Churned MRR (cancellations). For personal finance, your personal MRR is your total monthly subscription spending.
Related Terms
ARR
Annual Recurring Revenue — the annualized value of recurring subscription revenue, calculated as MRR multiplied by 12.
Churn Rate
The percentage of subscribers who cancel their subscription during a given time period, typically measured monthly or annually.
Recurring Billing
An automatic payment system that charges a customer at predetermined intervals for ongoing access to a product or service.
Subscription
A recurring payment arrangement where a customer pays at regular intervals to access a product or service.