MRR stands for Monthly Recurring Revenue, which is a financial metric used to measure the predictable, recurring revenue generated by a company each month. It is largely used in the subscription and billing management business. MRR is a key indicator of a company’s growth and financial health, as it provides a clear picture of the recurring revenue that the company can expect to receive on a monthly basis.
MRR is commonly used by subscription-based businesses, such as SaaS companies, internet service providers (ISPs), and other companies that offer recurring services to customers. The MRR calculation considers the number of paying customers, the average revenue per customer, and the monthly rate of churn (the number of customers who cancel their service each month).
This is an important metric for businesses to track, as it provides a clear picture of the company’s recurring revenue and can help to identify trends and patterns in the company’s growth over time. By monitoring MRR, businesses can make informed decisions about their operations and growth strategy and can measure the impact of changes to their pricing or customer acquisition strategies.