MRR SaaS

Monthly Recurring Revenue (MRR) is a critical metric for SaaS businesses that represents the predictable and recurring revenue generated by all active subscriptions in a given month. MRR is calculated by summing up the monthly subscription value of all paying customers, providing a snapshot of the company's current revenue generation.

MRR is essential for SaaS companies as it helps in forecasting future revenue, measuring growth, and assessing the overall health of the business. It's often broken down into components such as New MRR (from new customers), Expansion MRR (from upsells or cross-sells), Contraction MRR (from downgrades), and Churn MRR (from cancellations). Tracking these components allows SaaS businesses to identify trends and focus on strategies that drive sustainable growth.