Monthly Recurring Revenue (MRR)
Content
Definition
Monthly Recurring Revenue (MRR) is the amount of revenue a subscription-based business receives on a monthly basis.
Usage and Context
MRR helps subscription-based businesses track their consistent monthly income, allowing for better financial planning and growth strategies.
Frequently asked questions
- How do you calculate MRR revenue? To calculate MRR, multiply the total number of active subscribers by the average revenue per user (ARPU) for a month.
- What is the MRR formula? The MRR formula is: MRR = Number of Subscribers × Average Revenue Per User (ARPU).
- What is the difference between MRR and ARR? MRR (Monthly Recurring Revenue) measures monthly subscription income, while ARR (Annual Recurring Revenue) measures yearly subscription income.
Benefits
MRR provides a clear picture of consistent revenue, helps with financial forecasting, and supports growth planning.
Conclusion
Tracking MRR is crucial for subscription-based businesses to understand their monthly income, plan for growth, and ensure financial stability.
