Monthly Recurring Revenue (MRR) is the total predictable subscription revenue a business expects to receive every month, normalized to a monthly amount.
What is MRR?
MRR is the heartbeat of a subscription business. Because it normalizes every contract to a monthly figure, it lets you compare months on equal footing, forecast cash, and see the impact of new sales, expansion, and churn in one number.
How to calculate MRR
(annual plans ÷ 12, quarterly ÷ 3)
Worked example
If you have 100 customers on a $50/month plan and 20 customers on a $1,200/year plan, your MRR is (100 × $50) + (20 × $1,200 ÷ 12) = $5,000 + $2,000 = $7,000.
What's a good MRR?
Early-stage SaaS often targets 10–20% month-over-month MRR growth; at scale, 5–7% monthly (about 2x annually) is strong.
Frequently asked questions
Is MRR the same as revenue?
No. MRR counts only recurring subscription revenue, normalized to a month. One-time fees, services, and usage overages that aren't predictable are excluded. GAAP revenue is recognized differently and includes those items.
How is MRR different from ARR?
ARR (Annual Recurring Revenue) is simply MRR × 12. Teams selling mostly month-to-month track MRR; teams selling annual contracts usually headline ARR.
What should I exclude from MRR?
Exclude one-time setup fees, professional services, taxes, and non-recurring usage charges. Include only the recurring subscription value.
Related metrics
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