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What is monthly recurring revenue?

The predictable revenue a subscription business earns each month from active subscriptions.

Updated

Definition

Monthly recurring revenue (MRR) is the predictable subscription revenue a business earns in a month. Yearly plans count as their annual price ÷ 12; one-off fees are excluded.

Components

PartWhat it is
New MRRFrom new customers
Expansion MRRUpgrades and added seats
Contraction MRRDowngrades
Churned MRRCancellations

Net new MRR = new + expansion − contraction − churned.

Using it

Track the components, not just the total: a flat MRR can hide strong acquisition offset by heavy churn. Product data explains the movements: what churned accounts stopped doing, what expanding accounts started doing.

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