What is MRR?
Monthly recurring revenue, or MRR, is the normalized recurring subscription revenue a SaaS business expects in a month.
Quick answer
MRR is normalized monthly subscription revenue. It helps SaaS teams compare recurring revenue across plans, upgrades, downgrades, renewals, and churn. It becomes more useful when connected to acquisition source and campaign.
On this page
What you’ll learn
- Define monthly recurring revenue
- Understand expansion, contraction, and churned MRR
- Avoid common MRR calculation mistakes
- Connect MRR to attribution reports
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.
Frequently asked questions
- What does MRR stand for?
- MRR stands for monthly recurring revenue.
- Is MRR the same as cash collected?
- No. MRR normalizes recurring subscription value into a monthly number. Cash collection depends on billing schedules, invoices, taxes, refunds, and payment timing.
- Should one-time setup fees count as MRR?
- Usually no. MRR should represent recurring subscription revenue, not one-time fees.
- Why attribute MRR by source?
- MRR by source shows which channels create recurring subscription value, not only signups or one-time payments.
Continue learning
Create path and custom-event goals
Define important website actions as path or custom-event goals before building funnels or connecting revenue.
Read guide Goals & FunnelsBuild and read a funnel
Combine path and event steps into a funnel, measure conversion and drop-off, and investigate where visitors leave.
Read guide Goals & FunnelsSignup-to-paid funnel tracking
Track the path from visit to paid account, find where customers drop out, and see how later refunds or churn change the result.
Read guide Goals & FunnelsWhat is churn?
Churn measures lost customers or recurring revenue when subscriptions cancel, fail to renew, downgrade, or stop paying.
Read guidePut it into practice
Get to know your website’s visitors
Explore visitors, pages, sources, goals and funnels in the demo. You can start with web analytics and connect payments when you need them.