Monthly recurring revenue (MRR)
Also called: MRR
Recurring subscription revenue normalised to a single month, regardless of how often the customer is actually invoiced.
MRR = Σ (subscription value ÷ number of months in its billing term)
MRR normalises every subscription to a monthly figure so that customers on different billing terms can be compared and summed. A customer paying $12,000 annually in advance contributes $1,000 of MRR, not $12,000 in January and nothing for the rest of the year.
That normalisation is exactly why MRR is not the same as cash collected, and not the same as recognised revenue either. Three different numbers, three different purposes: MRR measures the size of the recurring base, cash measures liquidity, and recognised revenue measures what the accounting standards say you earned.
MRR movements
Reporting a single MRR total tells you almost nothing about the business. The useful view is the movement breakdown for the period:
| Movement | Meaning |
|---|---|
| New | MRR from customers who were not customers last period |
| Expansion | Additional MRR from existing customers — upsells, seats, tier upgrades |
| Contraction | MRR lost from existing customers who downgraded but stayed |
| Churn | MRR lost from customers who left entirely |
| Reactivation | MRR from previously churned customers returning |
Ending MRR = Starting MRR + New + Expansion + Reactivation − Contraction − Churn. If that waterfall does not tie out, the underlying subscription data has gaps in it — usually mid-term changes that were applied in one system and never reflected in another.
B2B SaaS companies selling annual contracts often report ARR instead, simply because their billing periods are annual and monthly granularity implies a precision the contracts do not have.
Stop calculating this in a spreadsheet
Bunny computes SaaS metrics, revenue schedules and retention from your live billing data — because quoting, subscriptions, usage and invoicing all sit in one system.