What is MRR?: How to calculate and increase it + an example
Posted: Mon Jan 20, 2025 9:45 am
The business model of a technology company is a key factor for its success. Among the fundamental strategies, the definition of MRR (Monthly Recurring Revenue) stands out, an essential financial indicator that acts as a roadmap towards profitability and sustainable growth.
Let's take a look at what it is, why it's so important, and some practical kuwait phone number list of how it's applied. If you're looking to improve your revenue strategy, find out all about MRR to optimize your results.
What is MRR?
MRR (Monthly Recurring Revenue) is the star metric for SaaS (Software as a Service) companies. Basically, it's the predictable revenue you receive each month from your subscriptions.
It is a safe value, because it is an amount of money that companies know they will have available . Monthly, quarterly, four-monthly, annual plans… help you to rest on a cushion that is safe and generates confidence.
It measures recurring monthly income, therefore we are talking about companies that base their business on subscription models , that is, their users, when contracting a plan, are subscribing to a service over time.
Types of MRR
Different types of MRR are usually analyzed, depending on the source of income.
New MRR for new customers
MRR expansion for when there are upgrades to higher plans
Reactivation MRR for customers who have reactivated their subscription
By understanding these different types, you can better analyze your SaaS business’s ROI, and make better-informed decisions.
What is the importance of calculating MRR?
Forget about unpredictable income rollercoasters. MRR shows you how much money you can expect to make each month, allowing you to plan your spending, investments, and even your next vacation!
Let's take a look at what it is, why it's so important, and some practical kuwait phone number list of how it's applied. If you're looking to improve your revenue strategy, find out all about MRR to optimize your results.
What is MRR?
MRR (Monthly Recurring Revenue) is the star metric for SaaS (Software as a Service) companies. Basically, it's the predictable revenue you receive each month from your subscriptions.
It is a safe value, because it is an amount of money that companies know they will have available . Monthly, quarterly, four-monthly, annual plans… help you to rest on a cushion that is safe and generates confidence.
It measures recurring monthly income, therefore we are talking about companies that base their business on subscription models , that is, their users, when contracting a plan, are subscribing to a service over time.
Types of MRR
Different types of MRR are usually analyzed, depending on the source of income.
New MRR for new customers
MRR expansion for when there are upgrades to higher plans
Reactivation MRR for customers who have reactivated their subscription
By understanding these different types, you can better analyze your SaaS business’s ROI, and make better-informed decisions.
What is the importance of calculating MRR?
Forget about unpredictable income rollercoasters. MRR shows you how much money you can expect to make each month, allowing you to plan your spending, investments, and even your next vacation!