Source: https://www.revvly.ai/glossary/mrr

[Glossary](https://www.revvly.ai/glossary)

# Monthly recurring revenue (MRR)

Also: MRR

**Monthly recurring revenue is the predictable revenue a subscription business expects to earn each month from active subscriptions. Annual and quarterly plans are normalised to a monthly amount, and one-off fees such as setup or services are excluded. It is the base figure behind most SaaS growth and retention metrics.**

## Formula

`MRR = sum of each active subscription’s billed price per period, normalised to one month`

## How to read it

Take MRR from the price actually billed for each period, not from a rescaled annual figure, so rounding stays consistent. Discounts that are active now should be netted out. MRR moves for five reasons: new business, expansion, contraction, churn and reactivation, and a good report shows each separately rather than one net number.

## In Revvly

- [Docs: reference metrics](https://www.revvly.ai/docs/reference/metrics)

## Further reading

- [The MRR you report isn't the MRR you earned.](https://www.revvly.ai/blog/mrr-gap)
- [The recurring revenue model: why it changes how a business has to be run](https://www.revvly.ai/blog/recurring-revenue-model)
- [ARR vs MRR: why finance teams need both, and how they connect](https://www.revvly.ai/blog/arr-vs-mrr-finance-teams)

## Related terms

- [Annual recurring revenue (ARR)](https://www.revvly.ai/glossary/arr)
- [Expansion MRR](https://www.revvly.ai/glossary/expansion-mrr)
- [Contraction MRR](https://www.revvly.ai/glossary/contraction-mrr)
- [Net revenue retention (NRR)](https://www.revvly.ai/glossary/nrr)

Revvly

Orchestrate the flow of revenue.

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