Management → business-foundations
MRR
Monthly recurring revenue from active subscriptions or contracts, used to monitor recurring business growth and retention.
MRR
MRR—Monthly Recurring Revenue—is the normalized monthly value of active recurring subscriptions or contracts.
Why it matters
MRR gives subscription businesses a frequent view of growth, churn, upgrades, and downgrades. It is especially useful when contracts have different billing intervals.
Mental model
Normalize recurring contract value to one month, then distinguish new MRR, expansion MRR, contraction MRR, and churned MRR.
Common mistakes
- Including one-time setup or consulting fees.
- Confusing invoices collected with recurring revenue earned.
- Reporting growth without showing churn and contraction.