MRR vs ARR
MRR and ARR measure the same subscription revenue on two different timescales. MRR is useful for tracking short-term momentum, ARR for reporting to investors and planning annual budgets.
MRR
The predictable revenue a subscription-based business expects to receive every month.
ARR
The predictable revenue a subscription-based business expects to receive over a full year.
| Time period | One month | Twelve months |
|---|---|---|
| Formula | Sum of monthly recurring revenue | MRR x 12 |
| Best used for | Spotting month-to-month trends and churn quickly | Annual planning, investor reporting, valuation |