Monthly Recurring Revenue

Monthly recurring revenue (MRR) is the sum of a subscription business's contracted, recurring revenue normalized to one month, at a point in time.

MRR is the heartbeat of a subscription business, because it collects predictable revenue into one trackable number. But its real power is not the total, it is the decomposition: this month's MRR is built from several forces that must be seen apart, namely new MRR from fresh customers, expansion from upgrades, contraction from downgrades and churn from departures. Two businesses can have identical MRR but a completely different mix, and it is the mix that tells health, not the total. The common trap is blending recurring revenue with one-off revenue; a setup fee or single-product purchase is not part of MRR and adding it inflates the figure. Like all subscription-revenue metrics, MRR comes from the billing system, not site behaviour; an analytics tool knows what the user does but not what each subscription is worth.