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Glossary entry

MRR

Also known as Monthly Recurring Revenue

The monthly equivalent of ARR — sum of subscription revenue normalized to a monthly basis. The operational sibling of ARR: ARR is the headline number, MRR is the number ops teams track week-to-week because changes show up faster. MRR movement = new MRR + expansion MRR − churn MRR − contraction MRR. The monthly cohort view reveals trends that ARR smooths over.

Category: Pricing & Revenue Reading time: 2 min

01Definition

TLDR
The monthly equivalent of ARR — sum of subscription revenue normalized to a monthly basis. The operational sibling of ARR: ARR is the headline number, MRR is the number ops teams track week-to-week because changes show up faster. MRR movement = new MRR + expansion MRR − churn MRR − contraction MRR. The monthly cohort view reveals trends that ARR smooths over.

02Why it matters

The metric that surfaces problems earliest. ARR is lagging by definition.

03Example

Worked example
$6M MRR composition: +$280K new, +$120K expansion, −$60K churn, −$30K contraction = +$310K net.
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