finance
MRR (Monthly Recurring Revenue)
Monthly subscription revenue, normalized to a recurring base. The headline SaaS metric.
Definition
MRR is the sum of all monthly recurring subscription revenue, normalized to a per-month basis (annual subscriptions divided by 12). It excludes one-time fees, professional services, and other non-recurring revenue. MRR is the most-watched metric in SaaS because it's predictable, scalable, and directly tied to valuation. MRR growth is decomposed into: new MRR (new customers), expansion MRR (upsells from existing), contraction MRR (downgrades), and churned MRR (lost customers). Net MRR growth = new + expansion - contraction - churn.
In your business
- →Decompose MRR growth weekly - the components tell different stories
- →Net MRR Retention (NRR) above 100% means existing customers grow faster than they churn - the holy grail
- →ARR = MRR x 12, used for annual reporting