MRR

Also called Monthly Recurring Revenue, ARR, and Annual Recurring Revenue

The predictable subscription revenue you can count on each month (MRR), or the same figure annualised (ARR). It strips out one-off payments to show the recurring core of the business.

Why it matters

For any subscription business, recurring revenue and how fast it grows is the headline number investors and you track. Its movements, new, expansion, churned, tell you exactly where growth is coming from and leaking out.

For example

A SaaS startup has 500 customers paying an average of 2,000 a month, so its MRR is 10 lakh and its ARR is 1.2 crore.

Go deeper

The SaaS Metrics That Matter David Sacks · article How to read recurring revenue and its movements, new, expansion, churned, the way an experienced SaaS operator does. Open sacks.substack.com →

My SaaS Metrics Syllabus Kellblog · article A seasoned SaaS operator's curated syllabus of the metrics worth understanding, recurring revenue chief among them. Open kellblog.com →

Related terms

Also in Starting Up

See how founders actually handle this on Money, pricing and metrics, part of the Starting Up hub.

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