How to calculate MRR

 

Formula:

No single formula.

Taxes and Stripe fees are included in both Monthly Recurring Revenue (MRR) and Revenue. Refunds and discounts are excluded.

MRR only includes revenue from subscriptions. Any other charges invoiced with a subscription are excluded, as are all other single purchases.

FirstOfficer.io supports volume-based charging if you have implemented it using Stripe subscription’s quantity field.

Description:

Monthly Recurring Revenue shows how much revenue you collected from subscriptions. There are several variations of MRR, like Committed MRR (CMRR). It is non-GAAP metric, so analytics apps may calculate it differently.

Use:

Assess SaaS business month-to-month performance. Calculate all other SaaS metrics. Calculate recurring profit. Create projections to estimate future performance.

Why we need it:

When different length subscriptions are offered, bookkeeping stops reflecting true business performance. MRR normalizes the revenue so that the time aspect of subscriptions becomes visible.

Affects:

All SaaS metrics

Formula:

No single formula. How FirstOfficer.io calculates MRR is explained in Calculation Principles article.

Variations:

Some businesses choose to include recurring but non-contracted revenue to MRR. They then use term Contracted MRR to denote the real MRR which excludes any single purchases. FirstOfficer.io only includes contracted revenue to MRR.

Also Called:

Contracted Monthly Recurring Revenue.

Check out our Guide to MRR where we get into all things related to Monthly Recurring Revenue – MRR.

Still need help? Please contact support