Monthly Recurring Revenue (MRR)
MRR is the predictable, normalised revenue a SaaS business receives every month from active subscriptions. It strips out one-time fees, usage spikes, and annual prepayments to give a stable monthly pulse of business health. MRR is the primary real-time revenue metric for SaaS — it moves faster than ARR and is the basis for calculating churn, expansion, and net revenue retention.
Note: Normalise annual plans to monthly (annual price ÷ 12). Exclude one-time fees, setup charges, and professional services revenue.
MoM MRR growth of 10–15% for early-stage; 5–8% for growth-stage SaaS
Flat or declining MRR for 2+ consecutive months signals structural churn or stalled acquisition
Benchmarks by segment
How to improve MRR
Segment MRR into New MRR, Expansion MRR, Contraction MRR, and Churned MRR each month — the composition tells you which lever to pull
Focus expansion MRR: selling more to existing customers has 5–25× lower CAC than new logo acquisition
Reduce contraction MRR by proactively engaging accounts that downgrade — often a product-fit signal, not a price signal
Improve trial-to-paid conversion — a 5% improvement in conversion rate can double MRR growth rate at most stages
Common measurement mistakes
Tools for measuring MRR
Best-in-class behavioral analytics with powerful event segmentation, funnel analysis, and retention charts that go far deeper than Google Analytics
Best-in-class event-based analytics with intuitive funnel, retention, and flow reports that surface actionable insights quickly
All-in-one product analytics platform combining analytics, session replay, feature flags, A/B testing, surveys, and a data warehouse — replacing multiple point solutions
Autocapture eliminates the need for manual event instrumentation — every click, pageview, and form interaction is tracked automatically from day one
All-in-one platform combining feature flags, A/B testing, product analytics, session replay, and web analytics — eliminating the need for separate tools
Best-in-class no-code editor for creating in-app walkthroughs, tooltips, and interactive guides without developer involvement
Frequently Asked Questions
MRR is a normalised, forward-looking metric. Revenue (as recognised on P&L) follows accounting rules — annual contracts are often recognised differently. MRR is the operational metric; recognised revenue is the financial reporting metric. For SaaS health, use MRR.
For pure usage-based pricing (no fixed monthly fee), use the trailing 30-day average usage revenue per customer. Many usage-based companies set a committed minimum (minimum MRR) and then track usage overage separately.