Growth
Total monthly recurring revenue
Every recurring contract is converted to a monthly rate before anything is added or subtracted, so the units match.
The Formula
MRR = monthly + annual/12 + expansion - churn
Every recurring contract is converted to a monthly rate before anything is added or subtracted, so the units match.
| Symbol | Meaning | Unit | Notes |
|---|---|---|---|
| MRR | Monthly recurring revenue | currency | Normalised recurring revenue for the month. |
| M | Monthly plans | currency | Subscribers billed monthly times their monthly price. |
| A | Annual plans | currency | Subscribers billed yearly times their annual price. |
| E | Expansion | currency | Extra recurring revenue from upgrades, net of downgrades. |
| C | Churn | currency | Recurring revenue cancelled during the month. |
What Each Symbol Means
MRRcurrency
Monthly recurring revenue
Normalised recurring revenue for the month.
Mcurrency
Monthly plans
Subscribers billed monthly times their monthly price.
Acurrency
Annual plans
Subscribers billed yearly times their annual price.
Ecurrency
Expansion
Extra recurring revenue from upgrades, net of downgrades.
Ccurrency
Churn
Recurring revenue cancelled during the month.
See It Worked With Real Numbers
A formula on its own does not tell you which number goes where. The how to calculate mrr page applies this equation to a concrete case, shows every intermediate step, and names the mistakes that produce a wrong answer even when the algebra is right.
Where This Formula Appears
This equation is the working core of How To Calculate MRR, filed under Business. Every number the guide produces comes from substituting into this one line.