Definition
MRR (Monthly Recurring Revenue) and ARR (Annual Recurring Revenue) are the bedrock metrics of subscription businesses. They strip out one-time payments and normalize to a recurring run-rate so you can compare months and forecast growth. A clean MRR/ARR view splits new MRR (from new customers), expansion MRR (from existing customers upgrading), contraction (downgrades), and churned MRR (cancellations). Net new MRR — new + expansion - contraction - churn — is the heartbeat of growth. Investors and operators care about MRR because it's the most predictable revenue type. AI agents can help you set up MRR tracking properly, build the MRR movement chart, and forecast forward.
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