Revenue Metrics
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Monthly Recurring Revenue (MRR)

Monthly Recurring Revenue, or MRR, is the total predictable revenue earned each month from active subscriptions. Calculate it by summing the monthly value of all active subscriptions. For early-stage SaaS, MRR above $50,000 is considered healthy. MRR is the foundation metric for any subscription or SaaS business.

Why MRR Matters

MRR is the single most important metric for subscription and SaaS businesses because it captures revenue momentum in real time. Unlike total revenue, MRR strips out one-time charges and gives you a clean signal of recurring health. Investors use MRR to evaluate growth rate, and operators use it to forecast cash flow, plan hiring, and set targets. A business growing MRR at 15%+ month-over-month in early stages is generally on a strong trajectory. Without MRR, you are flying blind on whether your recurring engine is accelerating or stalling.

How to Calculate MRR

Sum the monthly-normalized value of every active subscription. Weekly plans are multiplied by ~4.33, annual plans are divided by 12. Only include recurring charges — exclude one-time fees, setup charges, and usage overages unless they recur predictably.

MRR Formula
MRR = Σ (Monthly subscription value of each active customer)

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$
Monthly Recurring Revenue
$14.5K

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Industry Benchmarks

SegmentGoodAveragePoor
Early-stage SaaS>$50K$10K–$50K<$10K
Growth SaaS>$500K$100K–$500K<$100K
Consumer Subscription>$100K$20K–$100K<$20K
Mobile App>$30K$5K–$30K<$5K

Expert Tips

Track MRR by component: New MRR, Expansion MRR, Contraction MRR, and Churned MRR. The net tells you where growth is actually coming from.

Never include one-time revenue in MRR. Setup fees, professional services, and hardware sales distort the recurring picture and mislead investors.

Compare MRR growth rate month-over-month, not absolute MRR. A $5K MRR company growing 20% monthly will outperform a $50K MRR company growing 3% within a year.

If you offer annual plans, track the split between monthly and annual MRR separately. Annual contracts reduce churn risk but can mask monthly retention problems.

Frequently Asked Questions

What is MRR and why is it important?
MRR (Monthly Recurring Revenue) is the total predictable revenue your business earns each month from subscriptions. It's the primary metric for subscription businesses because it shows revenue momentum, helps forecast cash flow, and is the first number investors look at when evaluating recurring revenue companies.
How is MRR different from total revenue?
Total revenue includes one-time payments, setup fees, and non-recurring charges. MRR only counts recurring subscription revenue, normalized to a monthly basis. This makes MRR a cleaner measure of your business's sustainable revenue engine.
What is a good MRR growth rate?
For early-stage startups, 15-20% month-over-month MRR growth is considered strong. As companies scale past $1M ARR, growth rates typically slow to 5-10% monthly. The T2D3 framework (triple, triple, double, double, double annually) is a common benchmark for venture-backed SaaS.
How do I calculate MRR from annual plans?
Divide the annual subscription value by 12. For example, a $1,200/year plan contributes $100/month to MRR. Do not recognize the full annual amount upfront — that would overstate your monthly recurring revenue.

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Business Models Using MRR

MRR is a key metric for these business types. Click any model to see how Revenue Map calculates it automatically.

Subscription App
SaaS B2B
FinTech
HealthTech
EdTech
AI / ML

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