Monthly Recurring Revenue (MRR) refers to the consistent income a business generates every month from active, paying subscriptions. It captures only the recurring portion of revenue, offering a reliable view of monthly performance without including one-time purchases or usage-based fees.
To determine MRR, multiply the number of current customers by the amount they are charged monthly. This provides a clear picture of how much revenue is expected to come in each month from subscriptions alone.
Example: If 250 customers each pay $40 per month, the MRR would be:
250 × $40 = $10,000
MRR = Σ (Monthly Subscription Revenue from Each Active Customer)
Note: It reflects only recurring payments and excludes any one-time fees or usage-based income.
Benchmark figures for MRR can differ depending on the market segment and maturity of the business. For high-growth SaaS companies, a month-over-month increase in MRR of 10% to 20% is generally viewed as a sign of strong performance. Startups may aim for even higher rates during their early scaling phase, while more mature businesses focus on steady and sustainable gains.
Reactivation MRR is the recurring revenue recovered from previously churned customers who re-subscribe within a given period.
The projected amount of recurring revenue a company earns over a twelve-month period from active subscriptions.
A measure of how much recurring revenue is lost over time due to customer cancellations or plan downgrades.
The average expense involved in turning a prospect into a paying customer, factoring in all marketing and sales costs.
The mean monthly revenue generated from each paying user or business account.
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MRR helps companies track their predictable income each month, making it easier to forecast earnings, measure performance, and evaluate growth strategies.
No. MRR only includes income that recurs each month. One-off charges or service fees are excluded to ensure consistency.
Yes. MRR should reflect the actual billed amount, so any discounts given must be considered in the final calculation.