Quick definition: Monthly recurring revenue. The pulse of SaaS companies; weekly tracking is a sign of a healthy business.
How to calculate
MRR = Total monthly payments from all active subscribers.
Important: one-time sales are excluded — only recurring revenue counts.
Annual subscriptions are divided into monthly: a subscriber paying $1,200/year adds $100/month to MRR.
Types of MRR
New MRR: Revenue brought in by newly acquired customers.
Expansion MRR: From existing customers upgrading.
Contraction MRR: From plan downgrades (negative).
Churned MRR: Loss from canceling customers (negative).
Net New MRR = New + Expansion − Contraction − Churn.
Healthy growth rates
Early stage (year 1): Monthly 15–20% growth is excellent.
Mature stage: 5–10% monthly is sustainable.
Mature SaaS: Even 2–3% monthly is enough; real focus is retention.
Negative MRR growth for two consecutive months = a crisis.