Enter the total number of monthly subscribers and the average monthly revenue into the calculator to determine the MRR.
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The following formula is used to calculate monthly recurring revenue.
MRR = TS * AMR
- Where MRR is the monthly recurring revenue ($/month)
- TS is the total number of monthly subscribers
- AMR is the average monthly revenue per subscriber ($)
What is MRR?
MRR, short for monthly recurring revenue, is a term used in business, mostly with subscription-based services, to describe the total monthly revenue the company expects to see on a recurring basis.
The reason this term is used for subscription-type services is that subscribers typically pay a recurring fee for the service. Most often it’s a monthly fee, but it can even be annually.
How to calculate MRR?
First, determine the total number of subscribers the subscription has. For this example, this business offers software for helping with accounting, and it has on average 50,000 subscribers.
Next, determine how much these subscribers are charged each month on average. In this case, subscribers are charged a rate of $50 per month on average. It’s important to use an average rate because often time there are more than one service level and fee rate.
Finally, calculate the total monthly recurring revenue using the equation:
MRR = TS * AMR
MRR = 50,000 * $50
MRR = $2,500,000.00 /month