Monthly Recurring Revenue, or MRR, is a key metric used by subscription-based businesses to measure their predictable income. It represents the total revenue that a company expects to receive every month from its subscribers. By focusing on MRR, businesses can better understand their financial health and make informed decisions about growth and investment.
Calculating MRR is straightforward: simply add up all the recurring revenue from active subscriptions. This includes any monthly fees paid by customers but excludes one-time payments or variable charges. Tracking MRR helps companies identify trends, forecast future revenue, and assess the effectiveness of their sales and marketing strategies.