## What is a Monthly Recurring Revenue?

Often referred to simply as

**MRR**, monthly recurring revenue is the amount of total monthly revenue generate from subscriptions.

This does not include one-time setup, onboarding or other non-recurring fees generated from a subscription. This non-recurring revenue should be reported under a separate P&L line item.

## How to Calculate Monthly Recurring Revenue

- 1. Determine the total number of customers you have for each subscription plan.
- 2. If you have customers who have paid in advance on a multi-month subscription plan, then divide the total subscription value by the number of months in the plan.
- 3. Add all of the subscription values together to get the total monthly revenue.

**Example**
You have 1000 total subscribers. 500 of them have subscribed to the $10 starter plan payable monthly. The other 500 customers have purchased the $300 premier plan billed annually.

(500 x $10) + (500 x $300/12) = $17,500

**Simple MMR Formula Cheatsheet**

Annual or paid-in-advance subscription payment:

MRR = (Prepaid subscription revenue/number of months) x number of customers)

Monthly subscription payment:

MRR = (Monthly subscription revenue x number of customers)