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Ecommerce glossary > Monthly recurring revenue

Monthly recurring revenue

What is monthly recurring revenue (MRR)?

Monthly recurring revenue (MRR) is a key metric for subscription companies that measures the total amount of income generated from subscription sales over a month-long period. MRR is important for understanding the profitability and growth of companies operating under a subscription business model, including SaaS companies. 

How to calculate MRR for your subscription business

To calculate monthly recurring revenue, multiply the total number of active subscribers in your customer base in a given month by the average revenue per subscriber. As your subscription business grows, you may benefit from tracking elements of net new MRR: new MRR (added MRR from new customers), expansion MRR (also known as “upgrade MRR”—MRR added from existing customers), and churned MRR (MRR lost from subscription cancellations or downgrades).