What is MRR (Monthly Recurring Revenue)?

Monthly Recurring Revenue (MRR) is the total predictable revenue your business earns each month from all active subscriptions. It’s the heartbeat metric for subscription-based businesses.

Why It Matters

MRR provides a clear view of your revenue trajectory. Unlike one-time revenue, MRR is predictable, making it easier to plan investments, forecast growth, and value your business.

How to Calculate It

MRR = Number of Active Subscribers × Average Revenue Per Subscriber

Types of MRR

New MRR: Revenue from newly acquired subscribers
Expansion MRR: Additional revenue from existing subscribers (upgrades, add-ons)
Churned MRR: Revenue lost from cancellations
Net New MRR: New MRR + Expansion MRR − Churned MRR

MRR Growth Rate

MRR Growth Rate = Net New MRR ÷ Previous Month’s MRR × 100

Healthy subscription DTC brands target 10-20% monthly MRR growth in early stages, slowing to 5-10% at scale.