What is MRR?

MRR stands for monthly recurring revenue.

It is the normalized recurring subscription revenue a SaaS business expects in a month. If a customer pays EUR 120 per year, the normalized MRR is EUR 10 per month.

MRR helps teams understand the recurring part of the business without waiting for every invoice schedule to line up.

Types of MRR

Common MRR components are:

• New MRR from new customers.
• Expansion MRR from upgrades or added seats.
• Contraction MRR from downgrades or removed seats.
• Churned MRR from cancelled subscriptions.
• Reactivation MRR from returning customers.

Net MRR movement is the combination of those changes over a period.

MRR vs revenue collected

MRR is not the same as cash collected.

Cash collected depends on invoices, billing intervals, payment timing, refunds, taxes, and failed payments. MRR is a normalized subscription metric.

For example, an annual subscription can collect EUR 1,200 today and add EUR 100 in MRR. The cash and MRR are both useful, but they answer different questions.

Common MRR mistakes

Avoid these mistakes:

• Counting one-time setup fees as MRR.
• Ignoring downgrades and contraction.
• Treating failed payments as immediate churn without a policy.
• Mixing tax-inclusive and tax-exclusive amounts.
• Reporting MRR without source or cohort context.

MRR should be calculated consistently, or trends become hard to trust.

Why MRR needs attribution

MRR by source is more useful than signups by source.

A campaign can create many free accounts and little recurring revenue. Another source can create fewer customers with higher expansion and lower churn.

Attribution lets you compare sources by:

• New MRR.
• Expansion MRR.
• Churned MRR.
• Net MRR.
• Revenue per visitor.
• Payback quality.

Next steps

Use signup-to-paid funnel tracking to connect visitors to paid subscriptions. Read Stripe revenue attribution for SaaS when subscription events need to flow from Stripe into revenue reports.