What is MRR (Monthly Recurring Revenue)?
Monthly recurring revenue, or MRR, is a momentum metric that tracks the total income a business generates from subscriptions within a single month. It is an essential indicator for companies with a recurring revenue model, such as SaaS businesses and DTC subscription brands, as it reflects how much predictable revenue the business can rely on each month. To calculate your MRR, multiply the total number of active subscribers by the average revenue per subscriber in a given month. Monitoring MRR over time, including growth or declines, helps businesses assess performance and make strategic decisions.
Why does MRR growth matter for your subscription business?
MRR offers a clear view of your subscription business’s financial stability and growth potential. By tracking month-to-month changes, you gain insight into the effects of customer behaviour, churn, upgrades, downgrades, and acquisition efforts.
According to Recharge’s State of Subscription Commerce report, top-performing subscription merchants averaged MRRs of over $56,000, compared to just over $1,200 for mid-tier and $300 for bottom-tier businesses. What set them apart was their ability to:
These insights highlight that growing MRR is not just about gaining more customers, it is about creating value, increasing satisfaction and improving the overall customer experience. Tracking MRR, along with net new MRR and other metrics like churn and LTV, gives you a deeper understanding of how your business is evolving. It allows you to refine your pricing, product mix and retention strategies with confidence.
