SaaS & growth
MRR (Monthly Recurring Revenue)
Formula reviewed by Tahir Asif, CMA
Predictable subscription revenue normalized to a monthly figure, the core operating metric for SaaS.
MRR totals all active subscription revenue, normalized to a monthly amount regardless of actual billing frequency — an annual contract is divided by 12 for MRR purposes. It moves each period based on new sales, expansion, contraction, and churn.
MRR is an operational metric, not a GAAP-recognized revenue figure — finance teams often reconcile it against recognized revenue separately, since unusual billing patterns (large annual prepayments, mid-period upgrades) can make the two diverge for a given period.
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