MRR
MRR (Monthly Recurring Revenue) is the total predictable income a subscription-based SaaS company reliably receives each month from all of its active customers.
How it works
It is calculated by summing each customer's monthly subscription fee, and is a key metric for assessing the health of a subscription business, forecasting future cash flow, and measuring growth. Steady MRR growth usually indicates healthy customer retention and a sustainable business model.
Examples
- 1.A company offering project management software calculates its MRR by adding up the monthly fees from all of its customers.
- 2.An AI writing tool startup tracks month-over-month changes in MRR to judge whether its marketing and pricing strategies are effective.
- 3.When evaluating a SaaS company, investors pay close attention to its MRR growth trend and churn rate.
