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MarginMeter

MRR (Monthly Recurring Revenue)

MRR definition for SaaS and AI founders: what it means, how to calculate it, and common pitfalls when reading it in dashboards.

MRR is the monthly value of every active subscription, normalized to one month. Annual plans count as one-twelfth of their price; discounts are applied; tax, trials and usage-based charges are excluded.

Formula

MRR = Σ (subscription price ÷ months in billing interval) after discounts

In practice

MRR is a run-rate, not revenue earned. Use it for growth and retention; use revenue for gross margin.

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