What is Monthly Recurring Revenue (MRR)?
The amount of revenue a subscription-based business receives per month. Includes MRR gained by new accounts (net new), MRR gained from upsells (net positive), MRR lost from downsells (net negative), and MRR lost from cancellations (net loss).
Example
A software company offers subscription plans:
Basic Plan: $50/month
Standard Plan: $100/month
Premium Plan: $200/month
If they have:
100 Basic Plan subscribers
50 Standard Plan subscribers
25 Premium Plan subscribers
MRR = ($50 * 100) + ($100 * 50) + ($200 * 25) = $15,000
In this example, the Monthly Recurring Revenue (MRR) is $15,000.