What is MRR?

MRR stands for Monthly Recurring Revenue. It is a key metric for subscription-based businesses. MRR helps you understand how much predictable revenue you can expect to generate each month from your customers. It’s calculated by summing up the recurring revenue from all active subscriptions for a given month.

What You Can See in the MRR Report

1. New Business: Revenue gained from new customers who subscribed during the chosen time period.

2. Expansion MRR: Additional revenue from existing customers who upgraded or added new services.

3. Contraction MRR: Revenue lost from existing customers who downgrade their subscriptions or remove services.

4. Churned MRR: Revenue lost due to customers canceling their subscriptions.

5. Reactivation MRR: Revenue gained from customers who previously churned but have re-subscribed.

6. Change MRR: The difference between New MRR plus Expansion MRR and Reactivation MRR minus Churned MRR and Contraction MRR. This shows the net growth or decline in revenue.

7. Total MRR: The overall monthly recurring revenue for the selected period.

Why MRR is Important

1. Predictability: MRR provides a predictable revenue stream, which helps with financial planning and forecasting.

2. Growth Tracking: By monitoring MRR, you can easily see how your business is growing over time and identify trends.

3. Customer Insights: Understanding where your MRR is coming from (new customers vs. existing customers) helps you tailor your sales and marketing efforts.

4. Health Indicator: MRR is a strong indicator of the overall health of your business. Consistent growth in MRR often signifies a healthy, sustainable business model.

By using the MRR report, you can gain valuable insights into your business's financial performance and make data-driven decisions to drive growth and stability.