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The Internet Compass

Metrics

Monthly Recurring Revenue (MRR)

Also known as: MRR

Monthly Recurring Revenue is the normalised value of contracted subscription revenue for one month. It is typically broken into new, expansion, contraction and churned components to explain movement.

MRR is favoured by companies with monthly billing or high-velocity sales motions, where annual normalisation hides meaningful short-term movement.

The value comes from decomposition: new MRR, expansion MRR, contraction MRR and churned MRR together explain why the total moved, which a single ARR figure cannot.

Example

New MRR of $80k, expansion of $25k, contraction of $10k and churn of $30k produces net new MRR of $65k.