How to Calculate Monthly Recurring Revenue
What is Monthly Recurring Revenue?
Tracks predictable monthly revenue from subscription customers. Key metric for SaaS companies to forecast cash flow and valuation.
Step-by-Step Guide
- 1Count active paying subscribers
- 2Multiply by average monthly subscription price
- 3Add one-time add-on revenue
- 4Subtract cancellations (churn) impact
Worked Examples
Input
100 cust x $50
Result
$5000MRR
Common Mistakes to Avoid
- ✕Including cancelled subscription revenue until cancel date
- ✕Not accounting for discounts and annual payments
Frequently Asked Questions
How is MRR different from total revenue?
MRR includes only recurring subscription revenue; excludes one-time purchases and variable fees.
What's a healthy MRR growth rate?
Industry average 5-7% monthly growth; 10%+ is considered excellent for established SaaS.
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