Monthly Recurring Revenue (MRR)

Take each subscription’s recurring price, convert it to a monthly amount, and add the amounts together. An annual subscription priced at €2,400 contributes €200 to MRR. A one-time setup charge stays outside the calculation.

In the example below, all subscriptions are active, prices are fixed and amounts exclude tax. There are no discounts or usage charges. These assumptions belong alongside the result: two figures called MRR can represent different things if their underlying rules differ.

An annual payment can bring a large cash inflow in January without making January an unusually strong subscription month. MRR spreads the subscription price over months. Invoicing, cash collection and recognised accounting revenue each follow their own timing and rules.

Use MRR to understand the current recurring level of your subscription business. Use payment and accounting records to understand cash, receivables and recognised revenue. An unpaid invoice still needs attention, even when its subscription remains included in your MRR calculation.

If MRR rises from €40,000 to €44,000, ask where the additional €4,000 came from. New customers, upgrades, downgrades and cancellations tell different stories. Net growth alone cannot show whether existing customers are staying.

Document your measurement policy too: when does a subscription count as ended? How do you handle discounts, currencies and variable usage? Compare periods and systems using the same scope. Otherwise, a reporting change can look like a business change, and a team may spend time investigating growth that never happened.