Glossary · Business

MRR

Monthly Recurring Revenue–the predictable total revenue generated from all active subscriptions in a month.

Monthly Recurring Revenue (MRR) is a normalized measure of a subscription business's predictable revenue stream. It is calculated by summing the monthly value of all active subscriptions. MRR is broken down into components: New MRR (from new customers), Expansion MRR (upgrades and add-ons from existing customers), Contraction MRR (downgrades from existing customers), Churned MRR (from lost customers), and Reactivation MRR (from returning customers). Net New MRR = New + Expansion + Reactivation - Contraction - Churned. MRR is the foundational metric for SaaS businesses, used to calculate ARR (Annual Recurring Revenue), track growth rates, forecast revenue, and evaluate company valuation.

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