What It Means (Simple Explanation)
MRR is the total predictable revenue you earn every month from subscriptions. It’s steady, trackable, and a core health metric for any SaaS business.
Example
If you have 50 customers paying $200 each per month, your MRR is $10,000.
Why This Matters (To SaaS & Finance Teams)
This is the number SaaS teams live and die by. MRR tells you how much recurring revenue you are generating every month—and whether that’s trending up, down, or flat.
Ordway tracks MRR in real time by syncing your contracts, billing, and revenue schedules. It connects subscription changes (like upgrades or cancellations) to report accurate MRR.
How It Works (Break It Down Simply)
MRR = Sum of all monthly subscription charges (net of discounts, credits, and trials)
It includes: – New MRR (new customers) – Expansion MRR (upgrades) – Contraction MRR (downgrades) – Churned MRR (cancellations)
Track each of these separately to spot what’s helping—or hurting—your growth.
Common Headaches
- Confusion between invoiced revenue and MRR
- Manual tracking in spreadsheets = errors
- Delays in including upgrades, downgrades, churn in MRR reporting
Ordway automatically syncs and updates MRR when customers upgrade, downgrade, or leave.
Best Practices
- Break down MRR into segments (e.g., by product, customer size, or plan)
- Update MRR in real time, not just end-of-month
- Tie MRR to company KPIs
- Don’t include one-time charges or setup fees
- Use clean contract and billing data
When to Track MRR
All the time. Use it in weekly dashboards, monthly board reports, and every time you plan headcount, runway, or growth targets.
KPI Impact / What It Affects
MRR is used as input to calculate various other SaaS metrics including net retention rate, gross retention rate, churn rate.. It’s one of the most widely reported metrics.
Insights from SaaS Revenue Ops
Ordway’s ARR Guide breaks down how to calculateMRR/ARR for various different product lines, contract types, and distribution channels.
FAQ Section (Quick Answers to Real Questions)
What is MRR in SaaS?
Monthly Recurring Revenue—your predictable monthly income from subscriptions.
Does MRR include one-time charges?
No. Only recurring charges count.
How is MRR different from revenue?
Revenue includes everything. MRR is only the recurring piece.
Can I track MRR by product or region?
Yes, and you should—it helps with forecasting and growth planning.
Want to Go Deeper?
Let Ordway help you track MRR with clean, real-time subscription data. Request a demo or explore the Subscription Billing Guide.
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