Monthly Recurring Revenue (MRR)
The predictable revenue your business generates every month from subscriptions.
Definition
MRR is the total predictable revenue from all active subscriptions in a given month. It's the heartbeat metric for subscription businesses. MRR is broken down into new MRR (new customers), expansion MRR (upgrades), contraction MRR (downgrades), and churned MRR (cancellations). MRR × 12 = ARR (annual recurring revenue).
Why it matters for founders
MRR is the primary metric investors use to evaluate SaaS companies. MRR growth rate, net revenue retention, and MRR composition tell the story of your business health.
Example
100 customers on $50/month plans + 20 customers on $200/month plans = $5,000 + $4,000 = $9,000 MRR. If 5 customers upgrade from $50 to $200 next month, expansion MRR = $750.
How Foundra helps
Foundra's Pricing & Packaging card helps you structure pricing tiers that maximize MRR, and the MVP Scope card ensures you build the features that drive upgrades.
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Related terms
Annual Recurring Revenue (ARR)
The annualized value of your recurring subscription revenue.
Churn Rate
The percentage of customers who stop using your product in a given period.
Lifetime Value (LTV)
The total revenue a customer generates over their entire relationship with your business.
Unit Economics
The revenue and costs associated with a single unit of your business (usually one customer).