If you work for a SaaS company, you know exactly how important these metrics are. They give you a short and easy overview of the startup stage, financial status and dynamics.
The economy of most SaaS companies is based on regular payments from their users – subscriptions.

 

What is MRR – Monthly Recurring Revenue?

This one is easy – imagine you have 1000 subscribers, each pays €10 month. Yes, you guessed it – your MRR is exactly 1000 x €10 = €10 000.

And what if users make payments for the whole year €120? Just divide the payment by 12 and you will get the monthly revenue €10.

Companies usually offers several different plans. Here is an example with three plans:

Plan Monthly price Number of customers Total revenue
Basic €5 2 000 €10 000
Standard €10 1 000 €10 000
Pro €50 200 €10 000
MRR € 30 000

In this case, the company has the MRR = 30 000 EUR.

 

What is ARR – Annual Recurring Revenue?