MONTHLY RECURRING REVENUE
What MRR measures
MRR is the monthly value of your active subscriptions. It leaves out one-time revenue.
FORMULA
MRR formula
Multiply your active paying customers by the average monthly amount each customer pays.
EXAMPLE
100 customers paying $50 each month
Your MRR is $5,000. Your annual run rate is $60,000.
- Active customers
- 100
- MRR
- $5,000
- ARR
- $60,000
MONTHLY MOVEMENT
Track what changed from last month.
New customers and upgrades add MRR. Cancellations and downgrades reduce it.
Net new MRRNew + expansion − churn − contraction
Ending MRRStarting MRR + net new MRR
ARRMRR × 12
QUESTIONS
MRR questions
How do you calculate MRR?
Multiply active paying customers by their average monthly revenue. For example, 100 customers paying $50 a month gives $5,000 MRR.
What is the difference between MRR and ARR?
MRR is monthly recurring revenue. ARR is annual recurring revenue. ARR is MRR multiplied by 12.
What counts as MRR?
Include recurring subscription revenue. Do not include one-time setup fees, one-off services, or other revenue that does not repeat each month.
How do annual plans count in MRR?
Convert the plan to its monthly value. A $1,200 annual subscription counts as $100 MRR.
What is net new MRR?
Net new MRR is new MRR plus expansion MRR, minus churned MRR and contraction MRR.