# What is MRR – Monthly Recurring Revenue?

What is MRR – Monthly Recurring Revenue? Total fixed monthly revenue from subscriptions. MRR = number of subscribers × ARPU (average revenue per subscriber).

## How it works in practice

MRR is the business's 'base salary' — what's guaranteed to come in even without new sales this month. A store with $14,000 MRR can plan expenses, hire staff, and grow, because it knows its baseline.

## Related metrics

- ARR — MRR × 12 = ARR
- Churn MRR — MRR lost to cancellations
- New MRR — MRR added from new subscribers
- Expansion MRR — MRR added from upgrades

## Common misconception

'MRR is net revenue.' MRR is gross revenue from recurring billing — before churn, refunds, and costs. Net MRR growth = New MRR + Expansion MRR - Churned MRR. Keep the distinction clear.

## How to fix it

MRR not growing? (1) Compare New MRR to Churn MRR — if churn is erasing growth, the problem is retention, not acquisition, (2) check the failed-payment rate — expired cards silently 'steal' MRR, (3) add expansion MRR — upsell existing subscribers to higher tiers.

## Real-world example

A beauty box store: MRR $10,600, New MRR $2,500/month, Churn $2,350/month. Net: +$150/month — they thought 'we're growing.' In reality, it was a race against time. Fixing dunning emails and onboarding cut churn to $1,150. MRR grew $1,350/month.

## Where to start

Track four MRR metrics weekly: New, Churned, Expansion, Reactivation. Build a simple dashboard in a spreadsheet or ChartMogul. A drop in New MRR signals a marketing problem. A rise in churned MRR signals a product/experience problem.

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Category: Finance · From the [Jimmy OS KPI Glossary](https://jimmy-os.com/glossary/kpi.md) · Source page: https://jimmy-os.com/glossary/kpi/mrr-monthly-recurring-revenue