Monthly Recurring Revenue (MRR)
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.
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.
All SaaS metrics
No single formula. How FirstOfficer.io calculates MRR is explained in Calculation Principles article.
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.
Contracted Monthly Recurring Revenue.