What Is MRR? Monthly Recurring Revenue Explained With Examples
What MRR (monthly recurring revenue) means, how to calculate it, what to leave out, and the new, expansion and churned MRR every SaaS founder should track. With worked examples.
October 5, 2026 · 3 min read
MRR (monthly recurring revenue) is the subscription revenue your business can expect every month from the customers you have today. It's the main number SaaS founders track, because it shows growth without the noise of one-off payments. (If you want to show yours in public, founders.page puts MRR next to each product on your page. More on that at the end.)
Key takeaways
MRR = the monthly value of all active subscriptions. Yearly plans are divided by 12.
Leave out one-off fees, lifetime deals, refunds and free trials.
ARR = MRR × 12.
Watch the parts, not only the total: new, expansion, contraction and churned MRR.
Showing MRR in public is a strong trust signal, when you're comfortable with it.
How to calculate MRR
Add up what every paying customer is worth to you per month:
MRR = sum of each active customer's monthly subscription value
A worked example for a small SaaS:
Customer
Plan
Paid
Monthly value
A
Starter, monthly
$19/month
$19
B
Starter, monthly
$19/month
$19
C
Pro, yearly
$290/year
$24.17
D
Pro, monthly, 20% discount
$23.20/month
$23.20
E
Free trial
$0
$0
MRR
$85.37
Two details people get wrong:
Yearly plans count as one twelfth. Customer C paid $290 upfront, but adds $24.17 to MRR, not $290.
Discounts count at the discounted price. Count what the customer actually pays.
Lifetime deals. They're revenue, but not recurring. Counting them inflates MRR and hides churn.
Free trials and free plans, until the customer actually pays.
Usage overages that change a lot from month to month. Track them separately, or use a trailing average if they're steady.
Taxes and payment processing fees. Report MRR before fees, consistently.
The parts of MRR that matter more than the total
Your MRR changes each month for four reasons:
Part
What it means
Example
New MRR
New customers who started paying
3 new Starter plans: +$57
Expansion MRR
Existing customers who upgraded or added seats
One upgrade from Starter to Pro: +$10
Contraction MRR
Existing customers who downgraded
One downgrade: −$10
Churned MRR
Customers who cancelled
Two cancellations: −$38
Net new MRR = new + expansion − contraction − churned
In the example, net new MRR is $57 + $10 − $10 − $38 = $19. The total went up, but churn ate most of the new sales. Looking only at the total would hide that, which is why the parts matter.
MRR vs ARR vs revenue
What it counts
Who uses it
MRR
Recurring subscription revenue for one month
Early-stage SaaS, indie hackers
ARR
MRR × 12
Larger SaaS and B2B with yearly contracts
Revenue
Everything you were paid, including one-off income
Accountants, tax filings
A business can grow revenue with launches and lifetime deals while its MRR is flat. MRR is the more honest measure of whether a subscription business is working.
What's a good MRR growth rate?
There's no universal number, but early on you're comparing yourself to yourself. Many indie founders aim for steady month-over-month growth and watch churn closely. A business adding $500 of new MRR but losing $400 to churn has a retention problem, not a marketing problem.
Showing your MRR in public
Plenty of founders share MRR openly. It builds trust with customers, attracts collaborators and keeps you honest. Pieter Levels and Marc Lou both put revenue on their personal sites, and "open startups" publish their full dashboards.
If you want to share it without building a dashboard, founders.page lets you add MRR and users to each product on your page, labelled as self-reported, and turn them off whenever you like.
Each product on founders.page can show its MRR and users, or neither.
Create your page and add your products. It's free for the first 100 founders.
MRR stands for monthly recurring revenue: the predictable revenue a subscription business expects to earn every month from its active customers.
How do you calculate MRR?+
Add up the monthly subscription value of every paying customer. A customer on a $20 monthly plan adds $20. A customer on a $240 yearly plan adds $20 too, because yearly payments are divided by 12.
Is MRR the same as revenue?+
No. Revenue includes everything you were paid, including one-off fees, setup charges and lifetime deals. MRR only counts the recurring part, normalised to one month, which is why investors and founders use it to track growth.
What is the difference between MRR and ARR?+
ARR (annual recurring revenue) is MRR times 12. Early-stage SaaS founders usually talk in MRR, and larger companies with yearly contracts usually talk in ARR.
Do lifetime deals count toward MRR?+
No. A lifetime deal is a one-time payment, so it is revenue but not recurring revenue. Counting it in MRR makes growth look better than it is and hides churn.
Where can I show my MRR publicly?+
Many founders share MRR in public as social proof. On founders.page you can add revenue and users to each product on your page, labelled as self-reported, or leave them off.
Put your founder story in one link.
You, your products and your links, in a few minutes. Free for the first 100 founders.
