MRR is Monthly Recurring Revenue. ARR is Annual Recurring Revenue (MRR × 12). ARR is typically used for enterprise SaaS, while MRR is standard for most SaaS companies.

MRR Calculator

Calculate your Monthly Recurring Revenue from subscriber count and average revenue per user. See ARR, growth rate, and MRR breakdown. Essential for SaaS and subscription businesses.

What Is Monthly Recurring Revenue?

Monthly Recurring Revenue (MRR) is the predictable, normalized revenue a subscription business earns each month. It smooths out one-time charges, annual plans, and discounts into a single monthly figure. MRR is the foundation metric for SaaS and subscription companies because it reveals revenue momentum, helps forecast growth, and is the first number investors look at when evaluating a business.

MRR Formulas

MRR = Subscribers × ARPU

ARR = MRR × 12

Net New MRR = New MRR + Expansion − Contraction − Churned

MRR Components Explained

Healthy MRR growth comes from four components. New MRR is revenue from first-time customers. Expansion MRR comes from upgrades and upsells. Contraction MRR reflects downgrades. Churned MRR is revenue lost from cancellations. Net New MRR combines all four. A business with strong net new MRR is growing; negative net new MRR means revenue is shrinking even if new customers are signing up.

MRR vs ARR and When to Use Each

ARR (Annual Recurring Revenue) is simply MRR multiplied by 12. Early-stage and SMB-focused SaaS companies typically track MRR because it shows month-to-month momentum. Enterprise SaaS companies with annual contracts often report ARR because their revenue cycle is annual. Both metrics exclude one-time fees, setup charges, and professional services to keep the recurring signal clean.