Monthly Recurring Revenue (MRR) represents the normalized monthly value of a company’s recurring revenue. It is one of the most important metrics for subscription-based and SaaS businesses because it reflects revenue predictability and growth momentum.
MRR allows founders and operators to track how revenue changes from month to month as a result of new customers, expansions, contractions, and churn. Unlike total revenue, MRR excludes one-time payments and focuses only on recurring components.
MRR is often used as the base metric for forecasting, valuation, and operational decision-making. It is also commonly multiplied by 12 to calculate Annual Recurring Revenue (ARR), although this assumes stable month-over-month performance.
