MRR (Monthly Recurring Revenue) is the predictable revenue your subscriptions generate every month. It's the heartbeat metric of any SaaS: one number that compresses growth, retention, and pricing into a single trend line.

The formula: MRR = sum of all active subscriptions' monthly value (annual plans ÷ 12).

What counts — and what doesn't

Counts: monthly subscription fees, annual contracts normalized to monthly, recurring add-ons. Doesn't count: one-time setup fees, services, non-recurring credits, and (careful) trials that haven't converted. Inflating MRR with one-offs only lies to yourself.

The four movements of MRR

Every month, your MRR changes through four doors:

Movement	What it is
New MRR	Revenue from brand-new customers
Expansion MRR	Upgrades, seats added, usage growth
Contraction MRR	Downgrades
Churned MRR	Cancellations

Net new MRR = New + Expansion − Contraction − Churned. Tracking the four separately tells you which engine is broken when growth stalls — acquisition, monetization, or retention.

MRR, ARR, ARPU — quick map

ARR = MRR × 12. Same signal, annual scale (used for enterprise-leaning businesses).
ARPU = MRR ÷ active customers. Your average revenue per account — the lever pricing changes move.
LTV ≈ ARPU ÷ churn rate — see the LTV:CAC guide.

How to grow MRR (in order of difficulty)

Plug churn first. Lost MRR is the most expensive MRR to replace — see 8 ways to reduce churn.
Expand existing accounts. Seats, usage tiers, add-ons. Expansion revenue has ~zero acquisition cost.
Raise prices. The most under-used lever in early SaaS. A 10% increase usually loses far fewer than 10% of customers.
Add new customers. Last on purpose: pouring new MRR into a leaky bucket is the classic startup money fire.

Why founders obsess over the MRR graph

Because it's honest. Traffic can spike, signups can be gamed, but MRR only grows when people pay and keep paying. A flat MRR line with rising signups screams activation or pricing problems — exactly the diagnosis the AAARRR framework is built for.

FAQ

What does MRR stand for? Monthly Recurring Revenue — the normalized monthly value of all active subscriptions.

How is MRR calculated? Sum every active subscription's monthly price; divide annual contracts by 12. Exclude one-time fees.

What is the difference between MRR and ARR? ARR is simply MRR × 12. Companies with mostly annual contracts tend to quote ARR; monthly-billing products quote MRR.

What is net new MRR? New + expansion MRR minus contraction + churned MRR — your true monthly growth once losses are netted out.

GrowthPilot computes MRR, ARR, ARPU, and the four MRR movements live from your Stripe account. See it on your own data.