Glossary · SaaS metrics
What is monthly recurring revenue (MRR)?
Monthly recurring revenue (MRR) is the predictable subscription revenue a business expects to earn every month, normalized to a monthly amount and excluding one-time payments.
Also called: MRR
Updated
How is MRR calculated?
MRR = Σ monthly subscription value of every active customer Annual plan → MRR contribution = annual price ÷ 12
Count only recurring charges: one-time setup fees, lifetime deals, usage overages that aren't committed and refunds are excluded. Discounts reduce MRR by the discounted amount. Trials count as zero until they convert.
MRR changes are usually reported as movements: new (first-time customers), expansion (upgrades, more seats), contraction (downgrades), churned (cancellations) and reactivation. Net new MRR = new + expansion + reactivation − contraction − churned.
MRR example
You have 120 customers on a $19/month plan, 40 on $49/month, and 10 on a $490/year plan. MRR = 120 × 19 + 40 × 49 + 10 × (490 ÷ 12) = $2,280 + $1,960 + $408 = $4,648. Next month 12 new customers join at $19 (+$228), 3 upgrade from $19 to $49 (+$90) and 5 cancel at $19 (−$95). Net new MRR = $223, ending MRR $4,871. Model it with the MRR calculator.
Why MRR matters
MRR is the heartbeat of a subscription business: it smooths out billing timing, makes growth comparable month to month, and is the base for ARR, ARPU, churn and NRR. Investors and acquirers read it first.
Common MRR mistakes
- Booking an annual payment as 12× that month's MRR instead of spreading it.
- Counting one-time payments, lifetime deals or services revenue as recurring.
- Including customers in a failed-payment grace period as fully active for months.
- Reporting gross bookings rather than MRR after discounts.
MRR and VisitTrack
VisitTrack isn't a subscription-metrics tool and doesn't compute MRR — your billing provider or a dedicated metrics tool does. What it adds is where that revenue came from: every payment from Stripe, Polar, Lemon Squeezy, Paddle or Razorpay is attributed to the visitor's first-touch referrer, campaign and landing page, with refunds subtracted, so you can see which channels produce new MRR. See revenue attribution.
Frequently asked questions
How do you calculate MRR from annual plans?
Divide the annual subscription price by 12 and add that amount to MRR for every month of the contract, rather than counting the full payment in the month it was billed.
Is MRR the same as monthly revenue?
No. Monthly revenue includes one-time payments and the full value of annual invoices billed that month; MRR only counts normalized recurring subscription revenue.
Related terms
- Annual recurring revenue (ARR)Annual recurring revenue (ARR) is the yearly value of a company's active recurring subscription contracts — for most SaaS companies, MRR multiplied by 12.
- Average revenue per user (ARPU)Average revenue per user (ARPU) is the average amount of revenue a business earns per user or account over a period, usually per month — calculated as revenue divided by the number of users.
- Churn rateChurn rate is the percentage of customers (or recurring revenue) that a business loses during a period, out of the customers (or revenue) it had at the start of that period.
- Expansion revenueExpansion revenue is additional recurring revenue earned from existing customers — through plan upgrades, extra seats, add-ons or higher usage — as opposed to revenue from new customers.
- Net revenue retention (NRR)Net revenue retention (NRR) is the percentage of recurring revenue a business keeps from an existing group of customers over a period, after adding expansion and subtracting downgrades and churn, excluding new customers.
Tools and guides
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