What is MRR?
Monthly recurring revenue — the recurring, contracted revenue billed in a given month.
MRR — monthly recurring revenue — is the recurring revenue billed in a given month: active subscriptions at their current rates, normalized to monthly. It's the pulse metric of a subscription business because it moves monthly, decomposes cleanly into new/expanded/churned, and feeds ARR directly (× 12).
Normalization is where hand-built MRR goes wrong: an annual plan billed $1,200 once a year contributes $100 of MRR, not $1,200 in its billing month and zero after. MRR counts run-rate monthly value of active recurring contracts — annual-billed plans divided by 12, quarterly by 3 — regardless of when cash lands (cash timing is cash flow, not MRR).
The number earns its keep decomposed: MRR movement = new + expansion − contraction − churn. A flat month that's +$40k new and −$38k churn is a very different business than one that's simply +$2k. Segment-level MRR (by product or plan) exposes mix the same way segment gross margin does.
Formula
MRR = Σ (active recurring contracts normalized to monthly)
Annual-billed contracts count at price ÷ 12. One-time fees, services, and usage overages are excluded — cash collections are tracked separately from MRR.
The Sumwise question
Show MRR by month for the subscription segment, the month-over-month movement, and MRR growth since January.
Runs on monthly_revenue.csv. The monthly revenue sample filtered to Subscription — for a segment-level sample like this, the segment's monthly revenue is its MRR.
Worked example — monthly_revenue.csv
| MRR, January | $384,500 |
| MRR, September | $445,600 |
| MRR added since January | +$61,100 |
| MRR growth, Jan → Sep | +15.9% |
Subscription MRR grew from $384,500 to $445,600 over nine months — +$61,100, or +15.9%: the pace that, × 12, gives the $5.35M ARR.
monthly_revenue.csv — drop it into the demo's Your-own-CSV tab (or Excel) and re-run the example.
Common questions
Why did MRR move but revenue didn't?
Timing and scope: annual plans normalize to 1/12 per month regardless of billing, and MRR excludes one-off revenue that lands in the same month. MRR is run-rate value of contracts; revenue is what was recognized — they diverge exactly when cash and contract timing diverge.
Should trials or freemium users count in MRR?
No — only active, paying, recurring contracts. Pipeline metrics (trial counts, conversion) are tracked alongside MRR, not inside it.
MRR or cash collected?
Both, as different truths: MRR is the contractual pulse; cash collected includes annual prepayments landing in a heap. Runway math uses cash; growth math uses MRR. Keeping the two columns apart prevents the classic annual-prepayment illusion of a suddenly "profitable" month.
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Related terms
ARR
Annual recurring revenue — the yearly value of active recurring contracts, usually MRR × 12.
Run rate
A trailing period's revenue annualized to a full year — the forward-looking size of the business.
Year-over-year growth
Change versus the same period last year — (current − prior) ÷ prior, the growth measure that cancels seasonality.