What is the difference?

MRR vs Revenue

Monthly Recurring Revenue

Revenue

What is it?

Monthly Recurring Revenue (MRR) is the sum of all subscription revenue expressed as a monthly value. For most companies, MRR is the sum of all new business subscriptions and upgrades (sometimes called expansion), minus downgrades (or contractions) and cancelled subscriptions. Though not a Generally Accepted Accounting Principle (GAAP) value, it's the Revenue equivalent used by every SaaS company. MRR is used interchangeably with ARR.

Revenue is defined as the income generated through a business’ primary operations. It is often referred to as “top line” and is shown at the top of an income statement.

Who is it for?

Chief Revenue Officer

Chief Financial Officer

Sales Manager

Chief Financial Officer

Chief Revenue Officer

Formula

ƒ Sum(Recurring Revenue irrespective of billing interval expressed as a monthly value)

ƒ Sum(Revenue)

Example

If 10 customers are paying $150 per month, then MRR would be; MRR = $1500 If 7 customers are paying $200 per month, and 3 customers are paying $100 per month, then MRR would be; MRR = $1700

If a customer signs an annual contract for $12,000 consisting of monthly payments, then the revenue for each month of that year is $1,000, and the revenue for that year is $12,000.