More in LearnWhat Is Monthly Recurring Revenue (MRR)?
Monthly Recurring Revenue (MRR) is the total predictable revenue a business generates each month from active subscriptions. It helps businesses track growth, forecast revenue, and measure financial stability.
The formula is represented as
MRR=∑(Number of Active Subscribers×Average Revenue Per User (ARPU))Why does MRR matter? It matters because it provides predictable revenue insights for financial planning and helps assess growth trends and retention rates. For many companies, it is essential for tracking subscription business management, health, and investor reporting.
There are four 4ypes of MRR:
- New MRR – Revenue from new customers who subscribed this month.
- Expansion MRR – Additional revenue from upsells, add-ons, or plan upgrades.
- Churned MRR – Revenue lost due to subscription cancellations.
- Net MRR Growth – MRR after accounting for new sign-ups, upgrades, and churn.
