Revenue Metrics

Monthly Recurring Revenue (MRR)

The predictable revenue a subscription business expects to collect every month from active customers.

MRR is the single most-watched number in subscription businesses because it turns lumpy, unpredictable sales into a steady, forecastable signal. Unlike one-time revenue, MRR captures only the normalised, recurring portion of what customers pay — so annual plans are divided by twelve, and one-time fees are excluded entirely. Founders and investors use MRR to gauge the health of the revenue engine right now, not last quarter. It decomposes naturally into new MRR (fresh customers), expansion MRR (upgrades), contraction MRR (downgrades), and churned MRR (cancellations), making it a live dashboard of growth and leakage simultaneously. Most business decisions — hiring, ad spend, product bets — become far cleaner once MRR is reliable and well-segmented.