Sales Dictionary
Monthly Recurring Revenue (MRR)
Definition
Income that a company can reliably anticipate every 30 days.
Deep Dive
Monthly Recurring Revenue (MRR) is a vital metric for subscription-based businesses, representing the predictable revenue that a company expects to generate every 30 days from all its active subscriptions. It encompasses all recurring charges, including subscription fees, add-ons, and upgrades, but excludes one-time payments or variable usage fees. MRR provides a clear, standardized measure of a business's financial health and growth trajectory, especially critical for Software-as-a-Service (SaaS) and other recurring revenue models.
Examples & Use Cases
- 1A SaaS company with 500 customers paying an average of $100 per month in subscription fees would have an MRR of $50,000.
- 2A streaming service tracks its MRR increase from new subscribers joining and existing users upgrading to premium, ad-free plans.
- 3An online fitness platform monitors its MRR carefully, noting fluctuations caused by customer churn and new member sign-ups.
Related Terms
Annual Recurring Revenue (ARR)Churn RateCustomer Lifetime Value (CLTV)