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
MRR (monthly recurring revenue) is what active subscriptions and retainers are worth per month, without one off fees. 40 members at ₪350 is ₪14,000 MRR.
ARR
ARR (annual recurring revenue) is the yearly value of the recurring subscriptions and contracts active today, usually MRR × 12. A snapshot, not a forecast.
MRR, Time period:
One month
ARR, Time period:
Twelve months
MRR, Formula:
Sum of monthly recurring revenue
ARR, Formula:
MRR × 12
MRR, Best used for:
Spotting month-to-month trends and churn quickly
ARR, Best used for:
Annual planning, investor reporting, valuation
| Time period | One month | Twelve months |
|---|---|---|
| Formula | Sum of monthly recurring revenue | MRR × 12 |
| Best used for | Spotting month-to-month trends and churn quickly | Annual planning, investor reporting, valuation |