Monthly Recurring Revenue (MRR) is a metric that measures the predictable and recurring revenue a startup generates from its customers each month.

MRR is especially important for startups that use a subscription-based business model (ex: Netflix, Shipt, or The New York Times) as it helps assess the business's health and growth potential over time.

How to calculate Monthly Recurring Revenue (MRR)

($) Average Monthly Revenue per Customer x (#) Total Number of customers = ($) Monthly Recurring Revenue (MRR)

MRR can be used to calculate other important metrics, like Monthly Recurring Revenue Growth Rate (MRR Growth Rate) and Lifetime Value (LTV).

MRR Growth Rate measures the percentage increase or decrease in MRR over a specific period of time, while LTV measures the total revenue a startup can expect to generate from a customer over the course of their relationship.