What is MRR (Monthly Recurring Revenue)?
MRR is the total predictable subscription revenue a business earns each month, normalized to a monthly figure. It counts only recurring charges — subscriptions and recurring add-ons — and excludes one-time fees.
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Definition
MRR (Monthly Recurring Revenue) is the total predictable subscription revenue a business earns each month, normalized to a monthly figure. It counts only recurring charges — subscriptions and recurring add-ons — and excludes one-time fees. For SaaS, MRR is the core measure of revenue health and the foundation of revenue-based attribution.
How to calculate MRR.
MRR = number of active subscriptions × ARPA (average revenue per account), or equivalently, the sum of every active subscription's monthly recurring value.
Normalize non-monthly plans first — divide an annual plan by 12, a quarterly plan by 3. Then MRR breaks down into five movements that explain how it changes month to month:
Net New MRR =
New + Expansion + Reactivation
− Contraction − Churned
MRR example.
Start with 100 customers each paying $149/mo:
Why MRR matters for attribution.
For subscription businesses, MRR — not trial signups or pixel events — is the revenue you should attribute to marketing. A channel that produces cheap trials but little MRR is losing money; one that produces fewer, higher-MRR customers who expand is winning. You can only see that difference when attribution is measured in MRR.
That's why Signal Sparrow uses Stripe MRR as the source of truth: it syncs MRR, expansion and churn and reconciles revenue attribution to it, to the cent — so every campaign is judged on the recurring revenue it actually produced.
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MRR (Monthly Recurring Revenue) is the total predictable subscription revenue a business earns each month, normalized to a monthly figure, excluding one-time fees.
Multiply your number of active subscriptions by ARPA, or sum every active subscription's monthly recurring value — normalizing annual and quarterly plans to a monthly amount first.
ARR (Annual Recurring Revenue) is simply MRR × 12. MRR is the monthly view; ARR is the annualized view of the same recurring revenue.
New, expansion, reactivation, contraction and churned MRR. Together they net to "net new MRR," which explains how your total MRR changed over a period.
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