Definition
What is Monthly Recurring Revenue (MRR)?
The predictable revenue a subscription business earns each month.
Monthly recurring revenue (MRR) is the normalized monthly revenue from all active subscriptions. It excludes one-time charges and non-recurring revenue. MRR is the core growth metric for SaaS and subscription businesses — tracked as new MRR, expansion MRR, contraction MRR, and churned MRR to understand the components of net growth.
Formula
MRR = Number of Customers × Average Revenue per Customer per MonthExample
200 customers each paying $49/mo = $9,800 MRR. Annual Recurring Revenue (ARR) = MRR × 12 = $117,600.