Use this MRR calculator to quickly and accurately determine your monthly predictable income from subscription-based services, helping you make informed financial decisions, track business growth, and identify areas for revenue optimization.

What is MRR, Anyway?

MRR stands for Monthly Recurring Revenue. It is a key performance indicator (KPI) used to measure the predictable revenue generated by a business from all of its active subscriptions in a particular month. It includes recurring charges from discounts, coupons, and recurring add-ons, but excludes one-time fees.

MRR Formula:

Monthly Recurring Revenue 🟰 Number of Active Customers ✖️ Average Revenue per User

Example

Consider a company providing a subscription-based software service (SaaS).

• 5 customers are on a $100/month plan.
• 10 customers are on a $200/month plan.
• MRR Calculation:
  • (5 customers x $100) + (10 customers x $200) = $500 + $2,000 = $2,500
  • MRR = $2,500

MRR is an important metric for businesses to track because it provides a predictable view of future revenue. This information can be used to make informed decisions about budgeting, hiring, and product development.

For example, if a SaaS company knows that it has an MRR of $100,000, it can be confident that it will generate at least that much revenue each month. This allows the company to plan for its future growth and make necessary investments.

MRR is also a valuable metric for investors. When evaluating a subscription-based business, investors often look at MRR to get a sense of the company’s revenue growth and predictability.

TL;DR: MRR, or Monthly Recurring Revenue, is a metric that measures the predictable revenue generated by a business from all of its active subscriptions in a particular month. It is an important metric for businesses to track because it provides a valuable view of the company’s financial health and future prospects.