MRR (Monthly Recurring Revenue)
The total predictable subscription revenue your business earns each month. The headline metric for any SaaS business.
MRR is the sum of all recurring monthly subscription revenue. A business with 100 customers paying $50/month and 20 customers paying $200/month has MRR of $9,000.
The clean version breaks into four components, often tracked as "MRR movement":
- New MRR: new customers added
- Expansion MRR: existing customers upgrading or adding seats
- Contraction MRR: existing customers downgrading
- Churned MRR: customers who cancelled
Net new MRR for the month = New + Expansion - Contraction - Churned. This decomposition is more useful than the topline number alone — it tells you whether growth is coming from acquisition or retention, and whether churn is offsetting expansion.
MRR is the headline for SaaS because it's predictable. Unlike a transaction-based business where last month's revenue tells you nothing about this month, MRR carries forward — you start each month with most of your revenue already booked.
ARR (annual recurring revenue) is just MRR × 12. Use MRR for operational decisions; use ARR for headline benchmarking and investor conversations.
Annualised MRR growth rate is the single best signal of company health for early-stage SaaS — more than absolute revenue, more than profitability.
See also
- ARR (Annual Recurring Revenue) — The annualised version of MRR — what your subscription business would earn over a year at the current run-rate.
- Churn — The rate at which customers cancel their subscriptions. Compounds against you — small churn improvements drive huge LTV improvements.
- LTV (Lifetime Value) — The total revenue (or gross profit) you expect to earn from a customer across their entire relationship with you.
- Unit economics — The revenue and costs associated with one customer (or one transaction). The fundamental health check for whether scaling makes the business better or worse.
Ask Cashowa about mrr (monthly recurring revenue)
Apply this concept to your actual numbers — with verifiable math.