MRR (Monthly Recurring Revenue)
The monthly equivalent of ARR: the sum of contractual recurring revenue normalised to one month. It enables real-time tracking of recurring revenue trends and decomposition of growth into its constituent parts.
In practice
Analysing MRR in four components is standard practice: new MRR (new customers), expansion MRR (upsell and cross-sell), contraction MRR (downgrades) and churned MRR (cancellations). An expansion-to-churned MRR ratio above 1 signals a Net Revenue Retention above 100% — existing customers contribute more each month than churn destroys. Below 85% NRR, sustaining net growth becomes structurally difficult.