MRR (Monthly Recurring Revenue)
The predictable revenue that a business expects to receive every month from its subscription customers.
Definition
Monthly Recurring Revenue (MRR) is the amount of revenue a subscription business can reliably anticipate receiving every 30 days. It normalizes revenue from various subscription plans and contract lengths to provide a consistent metric for tracking business growth.
How to Calculate
Basic Formula:
MRR = Number of Customers × Average Revenue Per Customer (Monthly)
Real-World Example
SaaS Company: 500 customers paying $50/month = $25,000 MRR
Plus 100 customers on annual plans ($480/year) = $4,000 additional MRR
Total MRR = $29,000