Monthly Recurring Revenue
MRR
The predictable, normalized revenue your business generates every month from active subscriptions.
Definition
Monthly Recurring Revenue (MRR) is the total predictable revenue a subscription business earns each month, normalized to a single month regardless of billing cadence. It excludes one-time fees, professional services, and variable usage charges. MRR is typically broken into components: New MRR (new customers), Expansion MRR (upgrades), Contraction MRR (downgrades), and Churned MRR (cancellations).
Why It Matters
MRR is the heartbeat of any subscription business. It provides a consistent, comparable measure of revenue momentum and forms the basis for virtually every SaaS valuation and growth analysis. Investors treat MRR growth rate as a primary signal of product-market fit.
Example
If you have 200 customers paying $50/month and 50 customers paying $200/month, your MRR is (200 × $50) + (50 × $200) = $10,000 + $10,000 = $20,000 MRR.