GLOSSARY · CHURN METRICS
Monthly recurring revenue (MRR)
Monthly recurring revenue (MRR) is the subscription revenue a business earns each month, with annual and other plans converted to a monthly amount.
Also called MRR
MRR adds up the monthly value of every active subscription. An annual plan counts for one twelfth of its price each month, recurring add-ons are included, and one-time charges such as setup fees are not. Whether discounts are subtracted is a reporting choice; subtracting them gives a more conservative figure.
MRR is usually broken into movements: new, expansion (upgrades), contraction (downgrades), churned and reactivated MRR. These movements explain why MRR changed and feed metrics such as revenue churn, net revenue retention and gross revenue retention.
Definitions vary between tools, for example on trials, paused subscriptions, unpaid invoices and currencies, so the same business can see different MRR in different dashboards. Pick one definition and keep it.
Formula
Sum of the monthly-normalized recurring price of all active subscriptions, after the discounts you choose to subtract
Related terms
Go deeper
Sources
- Chargebee Docs: Recurring revenue (total MRR) chargebee.com
- Stripe Docs: Billing analytics (MRR settings) docs.stripe.com