Definition
MRR (Monthly Recurring Revenue) is normalized monthly revenue from subscriptions.
Why it matters
MRR is a core SaaS metric for tracking growth and retention, but it is not the same as cash collected.
Pricing implications
Pricing changes affect MRR quickly. Validate MRR impact against churn and expansion to confirm sustainability.
Measurement tips
Normalize annual contracts to monthly equivalents and exclude one-time fees.
Checklist
- Use consistent MRR definitions.
- Exclude one-time fees and services.
- Normalize annual contracts to monthly revenue.
- Track MRR by segment and plan.
- Separate new, expansion, and churned MRR.
- Compare MRR before and after pricing changes.
- Align MRR reporting with finance.
- Review MRR trends monthly.