What is MMR (Monthly Recurring Revenue)?
Monthly recurring revenue is mainly used by companies selling subscription-based services or products. It is an important business metric for SaaS companies.
The MRR gives you an estimated recurring return your company can expect based on your annual subscription.
MMR is one of the best ways to track the status of your subscription business over time. You need a clear understanding of your company’s current financial situation and how to manage it. Whether you’re overestimating the market value of a product, planning to launch a new feature or doubling your sales, it’s important to know the real impact of your decisions.
MRR stands for monthly recurring revenue.
This is the monthlyized version of ARR, or annual recurring revenue .
Online MRR calculation :
Enter Total Amount in EUROS monthly subscriptions
Enter Total amount in EUROS new monthly subscriptions
Enter Total revenue from upgrades and add-ons in EUROS
Enter Total amount in EUROS of cancelled or lost subscriptions
MMR formula :
The MMR formula is simple:
Total amount in EUROS Monthly subscriptions
+
Total amount in EUROS new monthly subscriptions
+
Total revenues from upgrades and add-ons in EUROS
–
Total amount in EUROS of cancelled or lost subscriptions
MRR example:
Let’s take the example of a company selling software on a monthly subscription basis.
It has 15 users who pay a monthly subscription of 30 euros.
During the month, 2 users decided to add options to their subscription, costing them an extra 8 euros per month.
During the month, 1 user stopped subscribing and 3 new users took out a subscription.
MRR = 15 * 30 + 3 * 30 + 2 * 8 – 1 * 30 = 450 + 90 + 16 – 30 = 526 recurring euros per month