MRR (Monthly Recurring Revenue)
The predictable total revenue generated by a subscription business every month. The lifeblood of SaaS companies.
Monthly Recurring Revenue (MRR) is the predictable, normalized total subscription revenue generated by a business on a monthly basis.
The Components of Net New MRR
- New MRR: Revenue added from brand-new customer acquisitions.
- Expansion MRR: Additional revenue gained from account upgrades, seat expansions, and add-on modules.
- Contraction MRR: Lost revenue from existing accounts downgrading to smaller tiers.
- Churned MRR: Revenue lost from accounts canceling their subscriptions entirely.
Net New MRR = (New + Expansion) - (Contraction + Churned)