MRR (monthly recurring revenue)
Also known as: Monthly recurring revenue
The monthly-normalised recurring revenue of a subscription business at a point in time.
MRR is the base unit of a subscription business. Annual plans are divided by 12 to normalise. One-time upsells are excluded. MRR changes through new signups (new MRR), expansion (upgrades, add-ons), contraction (downgrades), and churn (cancellations). The four MRR deltas are often called "the 4 Rs" — recruit, retain, raise, reactivate.
Formula
MRR = sum(active_subscription_monthly_value)
Worked example
A WooCommerce store has 400 active subscriptions: 300 at $29/mo, 80 at $49/mo, and 20 annual plans at $500/yr. Annual plans contribute $500 / 12 = $41.67/mo each. MRR = (300 × 29) + (80 × 49) + (20 × 41.67) = $8,700 + $3,920 + $833 = $13,453.
Related terms
- Net revenue retention- Revenue from the cohort at the end of the period divided by revenue from the same cohort at the start. Includes expansion + churn.
- Churn rate- The percentage of subscribers who cancel in a given period. Usually reported as a monthly percentage.
Related reading
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