Free MRR Calculator

Monthly Recurring Revenue (MRR) is a key metric for subscription-based businesses, particularly prevalent in the Software as a Service (SaaS) industry. MRR represents the total predictable revenue that a company expects to receive on a monthly basis from its subscription-based services or products. Here's the formula to calculate MRR:

MRR=Number of Active Subscriptions×ARPU

Number of Active Subscriptions: Count the total number of active subscriptions during the month. This could be the total number of paying customers or active accounts for the month..

Average Revenue Per User (ARPU) : ARPU provides insights into the average value that each customer contributes to a company's overall revenue.

Monthly Recurring Revenue (MRR) is instrumental in the valuation of Software as a Service (SaaS) companies by providing a clear snapshot of the recurring and predictable revenue generated on a monthly basis. Investors and acquirers consider MRR growth trends, as it indicates the company's ability to attract and retain customers, showcasing the strength of its subscription-based model. The predictability and sustainability of MRR contribute to a higher valuation, reflecting a robust and scalable business with the potential for long-term success.