What Is Monthly Recurring Revenue?

Monthly recurring revenue (MRR) is a calculation of revenue generation by month. Many Software-as-a-Service (SaaS) companies view this as “the holy grail metric” because it conveys an up-to-date measurement of the company’s health from an income standpoint.

If your business follows a recurring revenue model of profitability, then calculating MRR (along with similar metrics like annual recurring revenue, or ARR) will help you understand the health of your company, set goals for the future, and determine how you'll reach those goals.

How to Calculate MRR?

The simple way to calculate MRR is to take your Average Revenue per User (ARPU) on a monthly basis and then multiply it by the total number of users in a given month:

Monthly ARPU x Total Monthly Users = Monthly Recurring Revenue

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