Monthly Recurring Revenue (MRR) is a financial metric that measures the amount of predictable revenue that a business generates each month from its subscription-based products or services. MRR is important for businesses that rely on recurring revenue streams, as it helps them to forecast future revenue and make informed business decisions.
MRR is typically calculated by multiplying the number of paying customers by the average monthly revenue per customer. It is important to note that MRR does not include one-time fees or non-recurring revenue, such as setup fees or professional services. Instead, it only includes the predictable, recurring revenue that a business can expect to receive on a monthly basis.
MRR is a key metric for businesses that use a subscription-based business model, as it helps them to track the growth and stability of their revenue streams.