The Monthly Recurring Revenue (MRR) is the sum of your recurring revenue at the end of the month.
Example: In January, you have 3 customers.
- Customer 1 has been a customer for 6 months. They pay $12,000 upfront for an annual software subscription. In January, customer 1 contributes $1,000 to MRR.
- Customer 2 has been a customer for 2 months. They pay $1,000 each month on a month-to-month software subscription. In January, customer 2 contributes $1,000 to MRR.
- Customer 3 becomes a customer on January 1. They pay $24,000 upfront for an annual software subscription and an additional $3,000 for a one-time implementation. Since only the software cost is recurring, customer 3 contributes $2,000 to MRR.
Your total MRR for January is $4,000.« Back to Glossary Index