Business Term
MRR
Monthly Recurring Revenue
MRR
MRR is the monthly value of recurring contracted revenue in a subscription business.
Formula
MRR = sum of monthly recurring contract value
Use when
Use it for monthly SaaS growth, budgeting, and customer success priorities.
Watch out
Active monthly subscriptions, annual contracts converted to monthly value, recurring upsells
Updated: 06/27/2026Quality: ReviewedSources: 1
What it means
MRR tracks recurring subscription revenue month by month. Splitting new, expansion, contraction, and churn MRR shows where growth is created or lost.
How to calculate it
| Lens | Formula / treatment | When to use it |
|---|---|---|
| Basic formula | MRR = sum of monthly recurring contract value | Measures the monthly recurring base |
What counts / what does not
| Item | Treatment | Why it matters |
|---|---|---|
| Include | Active monthly subscriptions, annual contracts converted to monthly value, recurring upsells | They are recurring revenue |
| Exclude | Setup fees, one-time services, taxes, refunds, one-off usage charges | They inflate recurring revenue |
What moves the number
| Driver | Metric impact | What to watch |
|---|---|---|
| New / Expansion MRR | Added by acquisition and expansion | Shows growth sources |
| Contraction / Churn MRR | Lost through downgrade and cancellation | Shows revenue leakage |
When it helps
- Use it for monthly SaaS growth, budgeting, and customer success priorities.
How to use it
- Bridge new, expansion, contraction, and churn every month with one definition.
Decision cautions
- Billing, cash collection, accounting revenue, and MRR can differ.
Example
Example: 100 customers at 100,000 yen per month create 10 million yen of MRR.
Compare with
| Metric | Difference | Why read together |
|---|---|---|
| ARR | Annualized recurring revenue | MRR tracks monthly movement |
Common mistakes
- Including one-time revenue misstates the recurring base.
Frequently asked questions
How is MRR different from ARR?
MRR is monthly; ARR is annualized. Use MRR for monthly movement and ARR for annual scale.
Sources
| Sources | Kind | Link |
|---|---|---|
| YogoQ Core business foundation editorial baseline | editorial | — |