What is MRR (monthly recurring revenue)?
MRR is an acronym for monthly recurring revenue, a key momentum metric that calculates the total amount of income a business generates from subscription sales over a one-month period. For companies operating under a subscription business model, including SaaS companies, this metric helps measure predictable revenue on a month-to-month basis.
To calculate top-level monthly recurring revenue for your business, multiply your total number of active subscribers in a given month by the average revenue generated per subscriber. As your business grows, it can also be helpful to monitor your changes in MRR over previous months, or your net new MRR, for additional context into the health of your business.
Increasing MRR for your subscription business
In Recharge’s latest State of Subscription Commerce Report, we found that the top-tier subscription merchants had an average MRR of $56,096, compared to $1,271 for the middle-tier merchants and $316 for the bottom tier. We found that these top merchants outperformed their competitors in three key areas: cultivating customer loyalty and strong communities, leveraging integrations, and offering flexible checkout options, such as cross-selling and upselling. Tracking this metric over time to monitor MRR growth and changes in customer behavior is important for providing insights into your customer base and business strategy.