MRR (Monthly Recurring Revenue)

Monthly Recurring Revenue (MRR) is a crucial metric for subscription-based businesses. It represents the predictable and consistent income a company expects to receive from its subscription customers each month, similar to the steady stream of rent payments from tenants in a property. To calculate MRR, add up all the revenue generated from subscription fees, excluding any one-time purchases, over a given month. A growing MRR suggests that a business is acquiring more subscribers or retaining existing ones, while a declining MRR may indicate issues with customer churn. MRR helps businesses make informed decisions, such as adjusting pricing, marketing efforts, or customer retention strategies to achieve steady and predictable revenue streams, which are essential for long-term sustainability.