Monthly Recurring Revenue (MRR) Chart
This page describes Charts v3.
This chart is also available in our legacy Charts v2. See Charts v2 and v3 differences.
The Monthly Recurring Revenue (MRR) chart measures the normalized revenue of your active paid subscriptions down to a monthly value. It’s a way of normalizing the scale of your business to better understand your velocity or size outside of the fluctuations that may arise from varying subscription durations. It doesn't map directly to revenue, but it is a useful standardization.
MRR is computed by "normalizing" subscriptions to a 1-month period. Non-recurring subscriptions, consumable, or one-time purchases are not computed in MRR. For example:
- An active subscription that is $8/month will contribute $8 to MRR (
price * 1) each month it remains active - While an active subscription that costs $120/year will contribute $10 dollars per month to MRR (
price * 1/12) for 12 months each year it remains active
This normalizing of all durations to a 1 month period makes it easier to compare the value of different subscriptions of different durations together.
When an immediate product change results in a prorated charge for the remainder of the current billing period, MRR uses the new subscription's price for a full billing cycle rather than the prorated charge. For example, a $4 prorated top-up for the remainder of a monthly period on a $10/month product contributes $10 to MRR, not $4.
Revenue type
The MRR chart allows you to select and visualize three different revenue definitions:
- Revenue: The total monthly recurring revenue that would be generated by the active subscriptions in a given period.
- Revenue (net of taxes): The monthly recurring revenue that would be generated by the active subscriptions in a given period (as defined above), minus our estimate of revenue deducted from the stores for taxes (e.g. VAT, DST, etc).
- Proceeds: The monthly recurring revenue that would be generated by the active subscriptions in a given period (as defined above), minus our estimate of revenue deducted from the stores for taxes and commission.
Proceeds reflect RevenueCat's estimate of what you will earn from the stores for the revenue you generated, but keep in mind that the App Store's payment schedule is based on Apple's Fiscal Calendar, which does not align with calendar months. Learn more here.
In addition, to learn more about how RevenueCat estimates taxes and commissions deducted from the stores, click here.
Available settings
- Filters: Yes
- Segments: Yes
- Revenue Type: Yes
How to use Monthly Recurring Revenue (MRR) in your business
MRR is an important measure because it not only captures the size of your subscriber base, but translates that into a real velocity metric for your business by normalizing different durations to a common “denominator” (monthly recurring revenue). MRR and ARR are considered the standard velocity metrics for subscription software companies.
To understand how your subscriber cohorts are growing over time, try segmenting by first purchase month, changing the resolution to monthly, and creating a stacked area chart to see how monthly subscriber cohorts have translated into added MRR to your business over time. (Explore here, and change the date range to meet your needs)
Calculation
First, to convert a subscription payment to normalized monthly revenue, we apply the following conversion:
| Subscription Duration | Normalized Monthly Revenue |
|---|---|
| 1 Day | price * 30 |
| 3 Days | price * 10 |
| 7 Days / 1 Week | price * 4 |
| 2 Weeks | price * 2 |
| 4 Weeks | price * 1 |
| 1 Month | price * 1 |
| 2 Months | price * (1/2) |
| 3 Months | price * (1/3) |
| 6 Months | price * (1/6) |
| 1 Year | price * (1/12) |
Weekly subscription durations will underestimate MRR over periods longer than 1 month (e.g. a 1 Week subscription would renew 17 times in a 4 month period, not 16), but given the high number of renewals before that extra revenue would be realized, we instead calculate what would be generated in a 1 month period.
For every active paid subscription in a given period, we sum their monthly recurring revenue value (e.g. price * (1/12) for a yearly subscription) to yield your total MRR for that period.
For each period, MRR is a snapshot at the end of the period. At daily resolution, it reflects MRR at the end of that calendar day. At monthly resolution, it reflects MRR at the end of that month.
To understand how that snapshot is generated for each period, check out the MRR Movement chart.
FAQs
| Question | Answer |
|---|---|
| What counts as an active paid subscription for the MRR measurement? | Paid, unexpired regular subscriptions count toward MRR. Family Sharing access and promotional store subscriptions are excluded. Auto-renew status does not matter while access is active. Learn more here. |
| Does MRR exclude subscriptions with auto-renewal disabled? | No, MRR includes normalized monthly revenue from all active paid subscriptions – even if their auto-renew status is currently disabled. |
| Are non-recurring subscriptions, consumable, or one-time purchases included in MRR? | No, since these purchases do not represent recurring revenue, they are not included in the MRR calculation. |
| Why does my monthly revenue not equal my MRR? | MRR may differ from revenue because MRR normalizes subscription lengths and uses an end-of-period snapshot. For example, you may have few annual subscriptions renewing this month, which lowers this month's Revenue even though those active annual subscriptions still contribute normalized MRR. MRR changes as new subscriptions are added and active subscriptions churn. |
If a Stripe subscription is canceled with immediate effect, this may cause temporary unusual behavior in your MRR, since RevenueCat will estimate the length of a subscription based on the purchase & expiration dates if the product duration is unknown.