Monthly Recurring Revenue, commonly known as MRR, is a way of measuring predictable revenue streams from your subscriptions. It tells you, at any given point of time, how much recurring revenue your business can expect to earn in a month.
We take the revenue generated from all of your customers and convert it into a monthly format. Each time a new customer subscribes they will be added to the cumulative total. In addition to the new recurring revenue, we also consider
We do not consider following items in calculating your MRR:
The most important thing to note about MRR, is that the billed value of all subscriptions - whether you’re selling on daily, weekly, monthly or annual billing cycles - is converted into their monthly equivalent. We do this in the following way:
Obviously, for monthly subscriptions, we use the actual value charged, as there is no need to convert this further.
Subscription businesses generally treat MRR as one of their key KPIs, and as an excellent indicator of business health. It’s a great metric to prompt questions, and identify plans, products or customer cohorts which may need a little more attention in order to keep them happy and growing.
Some of the main questions which are answered by MRR include:
If you have questions about MRR, or would like to know more about getting the most from your subscriptions, get in touch with our team