Monthly Recurring Revenue (MRR)
Monthly recurring revenue (MRR) is the predictable revenue a company earns each month from active subscriptions, excluding one-time fees such as setup or services.
Also called: MRR
Why it matters
MRR gives subscription businesses a monthly view of their revenue base, which makes trends visible faster than annual figures. Teams break it into parts: new MRR from new customers, expansion MRR from upgrades, contraction MRR from downgrades and churned MRR from cancellations. Net new MRR, the sum of these, shows whether the business grew in the month.
MRR is the monthly version of annual recurring revenue, and ARR is often MRR multiplied by 12. Annual contracts are usually divided by 12 to count toward MRR. Companies should decide clearly how they treat discounts, trials, usage-based fees and paused accounts, and apply the same rules every month.
Example
At the start of a month a company has 100 customers paying $500 a month, an MRR of $50,000. During the month it adds 10 new customers at $500, five customers upgrade by $200 each and three cancel. New MRR is $5,000, expansion is $1,000 and churned MRR is $1,500, so MRR ends the month at $54,500.
Turn the definition into a working system.
We build the RevOps systems behind terms like this one. Tell us where your pipeline breaks and we will show you what we would fix first.
