What is MRR (Monthly Recurring Revenue)?
Turkish: MRR
MRR measures the recurring monthly portion of subscription revenue, showing how new sales, expansion, contraction, and churn affect SaaS growth.
What is MRR?
MRR (Monthly Recurring Revenue) shows the revenue a subscription product expects to earn again each month. One-time setup fees, consulting work, hardware sales, and other non-recurring items are left out so the recurring revenue base stays visible.
For a SaaS company, MRR is more useful than simply knowing what was invoiced this month. When new customers, upgrades, downgrades, and cancellations are tracked separately, the team can see whether growth comes from acquisition, expansion, retention, or price changes.
How MRR is Calculated
The simplest calculation adds the monthly subscription value of all active customers. If a customer pays annually, the annual contract value is divided by 12 to represent its monthly contribution.
- New MRR: Recurring monthly revenue from new customers
- Expansion MRR: Revenue gained from extra seats, modules, or upgrades
- Contraction MRR: Revenue lost through downgrades or reduced usage
- Churned MRR: Revenue lost when customers cancel
Net MRR growth is commonly read as New MRR + Expansion MRR - Contraction MRR - Churned MRR.
Business Use
MRR supports pricing decisions, sales targets, investor reporting, and cash-flow planning. For example, if new sales are rising but churn is rising at the same pace, total MRR may stay flat; the issue may be retention rather than acquisition.
ARR is the annualized view of recurring revenue. MRR is better for month-to-month movement, while ARR is useful for longer contract value and board-level reporting. A clean SaaS report keeps recurring and one-time revenue separate so product performance is not overstated.
Related Terms
ARR shows the annual recurring portion of subscription revenue, tracked in SaaS for growth, pricing, and forecasting decisions.
Churn RateChurn rate measures the share of customers or revenue lost in a period, showing retention health in subscription businesses.
Customer SuccessCustomer success helps customers reach the outcome they bought the product for while managing churn risk and expansion opportunities.
FreemiumFreemium is a SaaS model where basic use is free while advanced features, capacity, or support require a paid plan.
LTV (Customer Lifetime Value)LTV estimates the total gross revenue a customer is expected to generate across their relationship with a product or business.
Subscription ModelA subscription model gives customers access through recurring payment and is managed through revenue, usage, and churn metrics.
Usage-Based PricingUsage-based pricing ties customer spend to consumed resources, events, or transaction volume instead of a fixed plan alone.