Marketing & Sales Metrics

MRR (Monthly Recurring Revenue)

Predictable monthly revenue from subscriptions — the foundational metric for SaaS and any subscription business.

MRR = Sum of all monthly subscription revenues at the start of the month. Annual subscriptions are divided by 12. New MRR + Expansion MRR - Churned MRR - Contraction MRR = Net MRR change.

For Indian SaaS, MRR is reported in INR. Most India-based SaaS at ₹5L MRR = ₹60L ARR is the early stage; ₹50L-₹2Cr MRR = scale stage; above ₹5Cr = growth stage.

MRR ≠ revenue. A customer paying ₹12,000 annual subscription contributes ₹1,000 MRR. Cash-collected metric is different and matters for runway calculations.

India context

Indian SaaS companies often confuse MRR with revenue. A founder reports '₹10L revenue' meaning a one-time payment received, not ₹10L MRR. Investors only care about MRR — make sure you're using the term correctly.

Examples

  • A SaaS with 100 customers at ₹2,000/month = ₹2L MRR.
  • Annual deals get amortized: a ₹24,000 annual customer = ₹2,000 MRR.

FAQ

What's the difference between MRR and ARR?

ARR = Annual Recurring Revenue = MRR × 12. ARR is the simpler annualized version, MRR is the monthly version. Use ARR for valuation, MRR for operations.

Should annual contracts be MRR or one-time?

Always MRR (divided by 12). Annual contracts smooth into MRR — they're not one-time revenue. The cash collected may be lump sum but the recognized MRR is monthly.

What's a healthy MRR growth rate?

Early-stage SaaS: 10-20% month-over-month. Mid-stage: 5-10%. Growth-stage: 3-5% MoM. Anything below 3% MoM at small scale signals product-market-fit issues.

Related concepts

ARRARPUchurnexpansion revenueACV

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Related glossary entries

PAN — Permanent Account Number — 10-character alphanumeric ID issued by Income Tax Department, used as universal taxpayer ID.Churn — % of customers who cancel or stop subscribing in a period — one of the most important SaaS health metrics.ARR (Annual Recurring Revenue) — Annual run-rate of recurring revenue — the standard valuation metric for subscription businesses.ACV (Annual Contract Value) — Annualized value of one customer contract — used for measuring deal size in B2B SaaS.

More in Marketing & Sales Metrics

CAC (Customer Acquisition Cost)LTV (Lifetime Value)ROAS (Return on Ad Spend)AOV (Average Order Value)RTO (Return to Origin)GMV (Gross Merchandise Value)ChurnMQL (Marketing Qualified Lead)
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