What is Monthly Recurring Revenue (MRR)?
Nexa Consultancy | Startup & Finance Glossary
Monthly Recurring Revenue (MRR) is a key metric for subscription-based businesses that represents the predictable revenue a company can expect to receive every month. It normalizes revenue from different subscription terms into a consistent monthly figure.
For Startups: For early-stage startups, MRR is the most important metric for tracking growth and momentum. It provides a clear view of the company's trajectory and is a primary focus for investors in seed and Series A rounds.
For SaaS: SaaS businesses live and die by their MRR. Growth in MRR is driven by new customer acquisition (New MRR) and expansion from existing customers (Expansion MRR), while it is reduced by churn and downgrades (Churned MRR).
Calculation: MRR = Sum of all monthly recurring fees from active subscriptions. For an annual plan of ₹12,000, the MRR contribution is ₹1,000.