Monthly recurring revenue (MRR) is a financial metric that shows the revenue that a company expects to receive monthly from customers for providing them with products or services. Essentially, MRR measures the company’s normalized monthly revenue. Revenue normalization is critical for companies that offer various pricing plans for their products or services.MRR can also be broken down into several components that reveal how revenue is earned. The types of monthly recurring revenue include the following:
The three MRR components above allow us to calculate the Net New MRR. The net new MRR indicates the sources of MRR that cause an increase or decrease relative to the previous period.
Monthly recurring revenue (MRR) is a financial metric that shows the revenue that a company expects to receive monthly from customers for providing them with products or services. Essentially, MRR measures the company’s normalized monthly revenue. Revenue normalization is critical for companies that offer various pricing plans for their products or services.MRR can also be broken down into several components that reveal how revenue is earned. The types of monthly recurring revenue include the following:New MRR: Additional MRR earned from new customersExpansion MRR: Additional MRR earned from current customersChurned MRR: MRR vanished due to the customers’ cancellations of subscriptionsThe three MRR components above allow us to calculate the Net New MRR. The net new MRR indicates the sources of MRR that cause an increase or decrease relative to the previous period.
