MRR

Imagine you have 100 customers each paying $10/month for your software. Your MRR is $1,000. Next month, if nobody cancels, that $1,000 shows up again automatically. That's the beauty of recurring revenue — you don't have to re-sell anything.

MRR is the holy grail metric for subscription businesses. It tells you exactly how much money is coming in every month, like clockwork. Investors love it because it's predictable. Founders love it because it compounds — every new customer adds to the pile that's already paying.

When tech people brag on Twitter about "hitting $10K MRR," they're saying their app is earning $10,000 every month from subscriptions. It's the scoreboard of the SaaS game.

Because if you're building any kind of subscription product — even a simple newsletter with a paid tier — MRR is how you measure success. It's also the number that tells you whether you can quit your day job. $10K MRR = $120K/year. That's the dream for a lot of solo builders.

MRR = sum of all monthly subscription revenue, normalized to a monthly period (annual plans divided by 12). Key variants: New MRR (new customers), Expansion MRR (upgrades), Churned MRR (cancellations), Net New MRR (new + expansion - churned). ARR (Annual Recurring Revenue) = MRR × 12. Healthy SaaS companies aim for >5% month-over-month MRR growth.