MRR (Monthly Recurring Revenue)
MRR (Monthly Recurring Revenue) is the normalised monthly value of all active subscriptions at a point in time. It counts only recurring contract value — one-off fees, services and usage overages are excluded — so it is the cleanest single measure of a subscription business's size.
Formula
Worked example
A SaaS with 180 customers on $50/month plans and 20 customers on $2,400/year plans has MRR of (180 × $50) + (20 × $200) = $13,000.
MRR moves through five components: new, expansion, reactivation (up) and contraction, churn (down). Reporting the components separately — the "MRR bridge" — tells you far more than the headline number, which is why investors ask for it in exactly that shape.
The most common error is stuffing non-recurring items into MRR: implementation fees, overage charges billed once, or a discount recorded at list price. If it would not repeat next month at the same value, it is not MRR.
Compute it: MRR & ARR calculator