What does MRR mean?

Monthly Recurring Revenue (MRR) is a key metric used to measure the predictable and recurring income a company generates on a monthly basis.

MRR focuses on consistent revenue from subscriptions or contracts with monthly renewals, excluding one-time revenues such as upfront payments or single transactions. In SaaS models, MRR is calculated by summing up the monthly revenue generated from all active customers.

MRR allows companies to understand their long-term financial health and predict future income more accurately. This is useful for monitoring growth, evaluating customer retention, and planning budgets and expansion strategies.

New MRR represents the revenue generated from new customers within a month. Expansion MRR reflects the increase in revenue from existing customers, such as through upgrades or additional sales. Churned MRR measures the revenue lost due to cancellations or plan downgrades.

Tracking MRR is essential for subscription-based businesses, as it helps measure the impact of sales and retention strategies, ensuring a steady revenue flow.