Monthly Recurring Revenue.

Monthly Recurring Revenue (MRR) is the normalised monthly subscription revenue generated by a SaaS or subscription business's active customer base. It is the sum of all recurring subscription fees (excluding one-time charges and professional services) divided into a monthly figure. For annual subscribers, their annual contract value is divided by 12 to calculate their MRR contribution. MRR is the heartbeat metric of a subscription business — it is tracked weekly or monthly to identify growth trends.

MRR Components

Total MRR is broken into several components that reveal the underlying dynamics: New MRR (from newly acquired customers), Expansion MRR (from upgrades and upsells to existing customers), Contraction MRR (from downgrades), and Churned MRR (from cancellations). Net New MRR = New MRR + Expansion MRR - Contraction MRR - Churned MRR. Negative Net New MRR despite acquiring new customers indicates an expansion/churn problem.

MRR and Marketing Attribution

Attributing MRR to acquisition channels is the gold standard for marketing ROI measurement in SaaS. Tracking which channel (organic search, paid search, direct, referral) drove each trial sign-up or demo request — and then which of those converted to paying customers — allows the SEO and marketing teams to calculate MRR per channel and compare acquisition efficiency across the entire funnel, not just at the traffic or lead stage.