What is MRR (monthly recurring revenue)?
How is MRR calculated?
MRR is the sum of every active subscription's monthly fee. If a customer pays monthly, you take the plan price as it stands. If they pay for a year up front, you divide that figure by twelve so it counts as its monthly share. Add those amounts across every active customer and you have MRR.
A worked example keeps it concrete. Say a product has 40 customers, each on a plan of 50 a month. That is 40 × 50 = 2,000 in MRR. Add one customer on an annual plan of 1,200 a year: you divide 1,200 by twelve to get 100 a month, bringing the total to 2,100. The annual customer paid in one lump, but MRR still counts only their monthly share.
What's the difference between MRR and ARR?
MRR is the monthly view, and annual recurring revenue is the same number stretched over a year, or MRR multiplied by twelve. In the example above, 2,100 in MRR is 25,200 in ARR. Smaller teams tend to watch MRR because it reacts faster to a new signup or a cancellation, while ARR is the figure that lands in board decks and annual plans.
Why does MRR differ from revenue in my P&L?
MRR is a run-rate, not an accounting figure. Your profit and loss statement records the revenue actually recognised in a period, including one-off setup fees, refunds, and discounts that MRR leaves out. A month with a large annual prepayment can show revenue on the P&L that MRR spreads evenly over twelve months. The two answer different questions, so a gap between them is normal rather than a mistake.
Reading MRR from an export
MRR questions are usually answered from a subscriptions export, the kind you can pull from Stripe as a CSV. Rather than build a pivot table by hand, you can open that file and ask for the total in plain English. Paperswift reads the file in your browser and works out the query, and only your column names and their types are ever sent when you ask, never the values in your rows. For a one-off export like this it sits closer to a Metabase alternative than to a standing dashboard.
Frequently asked questions
How is MRR different from revenue on my income statement?+
MRR counts only recurring subscription fees, normalised to a monthly figure. Your income statement records all revenue recognised in the period, including one-off charges, setup fees, and refunds. The two rarely match exactly, which is why finance teams reconcile MRR against booked revenue rather than expecting a single shared number.
Does an annual plan count towards MRR?+
Yes, but you normalise it first. An annual subscription is divided by twelve so it contributes its monthly share to MRR, rather than landing as one large figure in the month it was billed. This keeps MRR smooth and comparable across months, even when customers pay yearly and their invoices arrive in lumps.
What is the difference between MRR and ARR?+
They describe the same recurring revenue over different windows. MRR is the monthly figure, and annual recurring revenue is simply MRR multiplied by twelve. Teams quote ARR for board decks and yearly targets, and they watch MRR month to month for a faster signal on growth, churn, and expansion. Both exclude one-off charges.
How do I work out MRR from a subscriptions export?+
Take the export of active subscriptions, keep only those currently billing, and sum each one's monthly price, dividing annual plans by twelve. A plain-language tool can do this from the file directly, reading your column names and their types, never the values in your rows, then returning the total and a chart.
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Start free todayLast updated · by Stefan