Monthly Recurring Revenue

Definition

Monthly Recurring Revenue is the income a company receives on a regular, monthly basis.

Why use it

This metric is suited best for subscription based business models. Together with metrics that track customer acquisition and churn it gives a good forecast of expected future revenues.

Adaptation

The same metric can also be calculated on an annual basis (Annual Recurring Revenue). This can make sense, for example, when the minimum subscription period is one year.

Alias
AbbreviationMRR
UnitCurrency (Euro/Dollar/YEN/…)

 

Calculation

The Monthly Recurring Revenue is calculated by adding up all recurring revenue streams.

∑ recurring revenues
MRR

Example

A company gets 50 € revenue each from 200 users and 100 € from 20 premium users per month.

(50 € x 200) 10.000 €
+ (100 € x 20) 2.000 €
12.000 €