Monthly Recurring Revenue (MRR)
The predictable subscription revenue that repeats every month — the number every other SaaS metric is built on.
What is it?
Monthly Recurring Revenue is the predictable revenue your subscriptions produce every month. Only recurring amounts count: a $50/month plan is $50 of MRR, a $600/year plan is $50 once you normalise it to a month, and one-time charges like setup fees do not count at all. Summed across every paying customer, that is your total MRR.
It is the foundation the rest of your metrics stand on. Growth rate, retention, lifetime value and net new revenue are all expressed in terms of MRR, so a loose definition here quietly distorts everything downstream. Normalise every plan to a monthly figure and be consistent about what counts as recurring.
How to calculate?
For each subscription, divide the amount paid by the number of months it covers: $49 monthly stays $49, $1,200 annual becomes $100, $300 quarterly becomes $100. Add the normalised figure across all active subscriptions — including recurring add-ons and per-seat charges — and leave out one-time payments.
From one period to the next, MRR moves for exactly five reasons — new, expansion, contraction, churn and reactivation. Tracking those movements, rather than just the headline total, is what turns MRR from a scoreboard into a diagnostic.