MRR (Monthly Recurring Revenue)

What is MRR (monthly recurring revenue)?

Monthly Recurring Revenue (MRR) is the steady, predictable income a business earns each month from active subscription customers. It’s a core metric for subscription-based businesses, helping them monitor growth, assess revenue trends, and make data-driven decisions about pricing, expansion, and retention.

MRR only includes recurring revenue from subscriptions—it doesn’t count one-time purchases, setup fees, or variable add-ons. By tracking MRR, businesses gain a reliable view of their monthly financial performance and can forecast future revenue with greater accuracy.

How to calculate MRR?

To calculate MRR, multiply the total number of active subscribers by the average monthly revenue per user (ARPU):

MRR = Number of Subscribers × Average Monthly Revenue per Subscriber

For example, if you have 100 subscribers paying $20 per month, your MRR is $2,000.

Why MRR matters?

MRR is a key metric for SaaS and subscription-based businesses. It allows for better budgeting, performance tracking, and investor reporting. Tracking MRR growth helps identify trends in customer acquisition, churn, and upgrades.

Example of MRR (monthly recurring revenue)

A Shopify app with 500 users, each paying $10 monthly, has an MRR of $5,000.

Driftcharge Tip

To boost MRR, focus on reducing churn, offering upgrade paths, and testing new pricing strategies that reflect your product’s value.

Ganesh Pawar

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Ganesh Pawar is the founder of Driftcharge, a subscription management app designed to help Shopify merchants streamline and scale their subscription businesses. With a deep focus on solving real-world pain points—like legacy account page support, flexible subscription options, and advanced analytics—Ganesh is passionate about building tools that drive growth and retention.