Monthly Recurring Revenue (MRR) is the predictable, recurring income a business earns from subscriptions or ongoing customer payments each month. It gives a clear picture of financial stability and growth potential.
You calculate MRR by multiplying the number of active customers by the average revenue per customer (ARPU). Adjust for upgrades, downgrades, and churn to get a complete picture.
MRR = Number of Active Customers × Average Revenue Per Customer
MRR = Number of Active Customers × Average Revenue Per Customer
If your company has 200 customers paying an average of $50 per month, your MRR is $10,000. This amount reflects your predictable revenue for that month, excluding one-time payments.
A good MRR depends on your business model, but consistent month-over-month growth and low churn are strong indicators of a healthy revenue engine.
Flat or declining MRR – especially when paired with high churn – can signal poor product-market fit, weak retention, or lack of customer engagement.
Reduce churn with better onboarding, support, and value delivery to keep customers subscribed longer.
Increase MRR by encouraging customers to upgrade plans or add new features that provide value.
Convert one-time payments into consistent monthly contributions through pricing and billing strategies.
