Monthly Recurring Revenue

Monthly recurring revenue (MRR) is the predictable income amount a business can expect to receive from month to month.

This is one of the most important metrics for any subscription business. To calculate your MRR multiply the average revenue per user (ARPU) by the total number of paying users.

MRR = ARPU x Number of Paying Customers

Related terms:

  • Expansion MRR is the additional MRR from existing customers (e.g. from upsells).
  • Contraction (or churned) MRR is the MRR lost due to cancellations or downgrades.
  • New MRR refers to the additional MRR that a business gets from new customers.
  • Reactivation MRR is the MRR earned from reactivating previously churned or canceled subscriptions.
  • Net MRR refers to the revenue from newly acquired and current customers minus the amount lost due to cancellations and downgrades.

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What is Monthly Recurring Revenue?

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