Monthly Recurring Revenue (MRR)

Definition:

Monthly Recurring Reveune (MRR) is a metric that shows the amount of income a company reliably makes — typically from subscriptions or contracts — every 30 days. 

Is MRR the same as revenue?

The difference between these two is that MRR measures your company’s monthly subscription-based revenue, while total revenue considers all incoming cash to your business. 

Should I use MRR or ARR?

MRR and ARR are like two sides of the same coin. They both measure reliable recurring revenue, just over different periods. So, which one you use may come down to which best fits and reflects your company’s needs. Do you sell annual subscription packages? Then maybe assessing your ARR is more helpful. Do you need a more granular look at month-to-month trends and near-term insights? Then MRR sounds more helpful. You get the idea. 

Is ARR just MRR times 12?

Yes! For once, easy math for the win. 

What is the expansion MRR rate?

The expansion MRR rate is a metric often used for SaaS startups that shows the additional recurring revenue generated from existing customers through add-ons, up-sells, or cross-sells. This measure helps you understand whether your company can add more value to customers and monetize that value.  

What is a good MRR for a startup?

Most industry experts agree that MRR growth between 10%–20% is what startups should seek to achieve. Reaching that figure requires maximizing add-on, up-sell, and cross-sell opportunities and working to reduce MRR detractors like customer churn. 

How do I calculate MRR startup?

MRR = ARPR (Average Revenue per Account) x Total Accounts that Month