Monthly recurring revenue, or MRR, is the predictable revenue a subscription business expects to receive every month from its active subscribers.
MRR is the central metric for any subscription-based business. It tells you how much revenue is locked in for the coming month before you acquire a single new customer. It’s the foundation for understanding growth, forecasting and the health of your business model.
Key takeaways
- MRR = total active subscribers × average revenue per subscriber per month
- MRR only counts predictable, recurring revenue, not one-time payments or variable purchases
- New MRR, expansion MRR, churned MRR and contraction MRR together explain how your total MRR changes
- Annual plan subscribers should be divided by 12 to normalise their contribution to monthly MRR
- MRR growth rate is one of the most-watched metrics in subscription businesses
How MRR is calculated
The basic formula:
MRR = number of active subscribers × average revenue per subscriber per month
Example: 200 active subscribers paying €29/month = MRR of €5,800.
If subscribers are on different plans, sum each tier separately:
- 150 subscribers × €19/month = €2,850
- 60 subscribers × €49/month = €2,940
- 10 subscribers × €99/month = €990
Total MRR = €6,780
Annual plans. If a subscriber pays €240 for a full year, their contribution to MRR is €20/month (€240 ÷ 12). Don’t count the full annual payment in the month it’s received, that distorts your month-to-month MRR trend.
What MRR includes and excludes
MRR counts only predictable, committed recurring revenue.
Include:
- Monthly subscriptions
- Annual subscriptions (normalised to monthly)
- Fixed monthly fees
Exclude:
- One-time setup fees
- Variable usage charges (unless they’re predictably recurring)
- Refunds that have been processed
- Revenue from churned subscribers
The goal is a number that reflects what you can reliably expect each month going forward, not what you actually received in any given month.
The four types of MRR movement
Your total MRR changes through four inputs. Understanding which is driving change tells you where to focus:
New MRR. Revenue added from customers who subscribed this month for the first time. This is your acquisition engine.
Expansion MRR. Revenue added from existing customers who upgraded, added seats or moved to a higher tier. Expansion MRR is efficient growth because you’re increasing revenue without acquisition cost.
Churned MRR. Revenue lost from customers who cancelled. This is the leak in the bucket.
Contraction MRR. Revenue lost from existing customers who downgraded. Less severe than churn but worth monitoring.
Net new MRR = New MRR + Expansion MRR − Churned MRR − Contraction MRR
If expansion MRR exceeds churned and contraction MRR, you have negative net revenue churn, your existing customer base is growing in value even if some customers leave. That’s one of the strongest signs of a healthy subscription business.
MRR vs ARR
Annual recurring revenue (ARR) is simply MRR × 12. The two terms describe the same underlying business performance, just scaled to different time horizons.
ARR tends to be used in investor reporting and for larger SaaS businesses. MRR is more useful for operational decisions because it responds faster to changes, you can see the effect of a new pricing tier or a churn spike within weeks rather than waiting for annual reporting.
MRR growth rate
MRR growth rate measures how quickly your recurring revenue base is expanding:
MRR growth rate = (current MRR − previous MRR) ÷ previous MRR × 100
Month-over-month growth rates vary widely by business stage. Early-stage subscription businesses that are growing well might show 10, 20% monthly growth. More mature businesses at scale might target 5, 10% monthly as a healthy rate.
Negative MRR growth rate means churned + contraction MRR exceeded new + expansion MRR. This is the metric to watch, it’s an early signal that growth has stalled or reversed.
Tracking MRR in WooCommerce
WooCommerce doesn’t calculate MRR natively, it reports revenue as it’s received, not normalised to a monthly recurring basis.
Burst Pro’s subscription analytics shows MRR alongside active subscriber count, new subscribers, cancellations and customer lifetime value. You can track how MRR changes month over month, see which pricing tiers are growing and spot the early signals of churn before they compound.
All data is stored locally on your WordPress site. Your subscription revenue data stays on your server.
“MRR is the first number I look at each month. Everything else, acquisition, churn, expansion, shows up in that single number. If it’s moving in the right direction, we’re growing. If not, something’s off and we dig in.”
– Hessel, co-founder, Burst Statistics
FAQs
MRR is the total monthly recurring revenue from all active subscriptions, normalised to a monthly figure. For WooCommerce Subscriptions or EDD, it’s the sum of what all your active subscribers are paying divided to a monthly basis. It tells you how much predictable revenue your subscription base generates each month, independent of one-time sales.
No. Monthly revenue includes everything you received in a month: one-time purchases, setup fees, renewals. MRR is only the predictable, recurring portion. A month where you had a large product launch will show high total revenue, but MRR may be unchanged if those sales were one-time.
Gross merchandise value (GMV) is the total value of all transactions on a platform, including one-time purchases. MRR is specifically the recurring subscription revenue, normalised to monthly. A marketplace or ecommerce store would use GMV; a subscription business uses MRR.
Whenever your business has a significant recurring component. If more than 20 to 30% of your revenue is recurring subscriptions, MRR is a more useful health metric than total monthly revenue because it reflects what’s actually predictable and compounding. Total revenue can spike and drop with launches and promotions. MRR is the steady baseline underneath those fluctuations.
Track your recurring revenue inside WordPress
MRR is the clearest signal of subscription health. Burst Pro shows MRR, subscriber counts and retention data directly inside WordPress, no third-party dashboard, no data leaving your server.
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Related definitions: what is churn rate, what is customer lifetime value and what is average order value.
