Revenue Metrics

MRR

Monthly Recurring Revenue

Monthly Recurring Revenue (MRR) is the predictable revenue your business earns every month from subscriptions. It's the heartbeat of any SaaS business.

MRR = Sum of all monthly subscription revenue

If you have 100 customers paying $50/month, your MRR is $5,000.

Why MRR Matters

MRR gives you a real-time pulse on business health. Breaking it down into New MRR, Expansion MRR, Churned MRR, and Contraction MRR shows you exactly where growth is coming from, and where you're leaking revenue.

Industry Benchmarks

> 10% of total MRR (healthy growth)

New MRR %

> 5% of total MRR (good upsell motion)

Expansion MRR %

< 3% monthly (healthy retention)

Churned MRR %

Common Questions About MRR

What's the difference between MRR and monthly revenue?

MRR only includes recurring subscription revenue. One-time payments, setup fees, and professional services are excluded because they're not predictable.

How do I handle annual contracts in MRR?

Divide annual contract value by 12. A $12,000 annual contract contributes $1,000 to MRR each month.

What are the components of MRR?

MRR breaks into: New MRR (new customers), Expansion MRR (upgrades), Contraction MRR (downgrades), and Churned MRR (cancellations). Net New MRR = New + Expansion - Contraction - Churned.

Learn More About Connected Concepts

ARR

Annual Recurring Revenue

Annual Recurring Revenue (ARR) is the annualized value of your recurring subscri...

NRR

Net Revenue Retention

Net Revenue Retention (NRR) measures the percentage of recurring revenue retaine...

Churn Rate

Customer Churn Rate

Churn rate is the percentage of customers (or revenue) that cancel or don't rene...

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