Learn more about common financial (and startup) terms here. To learn more about Pilot, fill out the form below.
Monthly recurring revenue (MRR) is how much your business brings in from subscriptions during a single month.
You can calculate your MRR by multiplying the number of users or customers by their respective subscription prices and adding the results (if there are quarterly or annual plans, you can include the monthly amount). You may also need to account for changes from upgrades or downgrades during the month. However, don’t include one-time charges or variable fees in your MRR.
Taking a more nuanced look at specific changes within your MRR, such as MRR growth from new customers versus loss from churn , can also be insightful. For example, you may want to address a high churn rate even if you have a positive overall MRR due to increasing your new customers and upselling.
While MRR is important for short-term goal setting and analysis, your annual recurring revenue (ARR) is the more commonly used metric for understanding your company’s long-term financial health and growth.
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