Monthly recurring revenue
The predictable revenue that repeats every month from subscriptions, normalised so annual and monthly plans are comparable.
Monthly recurring revenue is the part of your income that arrives again next month without anyone selling anything: subscriptions, memberships, ongoing plans. Annual plans are divided by twelve so the two are comparable, and one-off sales are excluded — that exclusion is the entire point.
What makes it worth tracking separately is that it decomposes. This month's number is last month's plus new, plus expansion from existing customers, minus contraction, minus churn. Two businesses can add the same $4,000 and be in completely different health: one added forty new customers while losing thirty, the other added six and lost none. The headline hides that; the components do not.
The common distortion is counting things that are not recurring. A three-month sponsorship, an annual audit, a project that happens to repeat — none of these renew by default, and treating them as recurring makes a forecast that quietly assumes work you have not sold yet.
Worked: you start the month at $18,000. New subscriptions add $2,400, existing customers upgrade by $600, downgrades cost $300 and cancellations cost $1,700. You end at $19,000 — up 5.6% on the surface, while churn ate 71% of what new sales brought in.
Also known as
- MRR
- ARR
- recurring revenue
Relevant for
- Founders
- Report the components, not the headline: growth that is 70% replacement is a retention problem wearing a growth number's clothes.
- Creators
- Recurring revenue is what turns a channel into something that pays you in a month you did not publish — count only what renews without you asking.