1. What is Monthly Recurring Revenue (MRR)?

Monthly Recurring Revenue (MRR) is a key metric for subscription-based businesses that represents the predictable revenue a company can expect to receive every month. It's calculated by summing all active subscription revenues for that month.

2. How Does the Calculator Work?

The calculator uses the MRR formula:

Where:

• \( \sum \) — Summation of all values
• Customer Monthly Payments — Individual subscription payments from all customers

Explanation: The calculator adds up all monthly subscription payments to determine the total recurring revenue for the month.

3. Importance of MRR Calculation

Details: MRR is crucial for SaaS and subscription businesses to track growth, predict future revenue, measure business health, and make informed decisions about investments and expenses.

4. Using the Calculator

Tips: Enter all customer monthly payment amounts separated by commas or new lines. The calculator will sum all valid positive values to compute the total MRR.

5. Frequently Asked Questions (FAQ)

Q1: What types of payments should be included in MRR?
A: Include all recurring subscription fees, but exclude one-time payments, setup fees, and non-recurring charges.

Q2: How often should MRR be calculated?
A: Typically calculated monthly to track growth trends and business performance over time.

Q3: What's the difference between MRR and ARR?
A: MRR is monthly recurring revenue, while ARR (Annual Recurring Revenue) is MRR multiplied by 12, representing yearly predictable revenue.

Q4: Should discounted subscriptions be included at full price?
A: No, include the actual recurring payment amount, not the full price before discounts.

Q5: How does churn affect MRR?
A: Customer churn (cancellations) reduces MRR, while new subscriptions and upgrades increase it.