MRR

MRR is the sum of subscription revenue a business can expect in a given month, with annual plans divided by twelve so they do not distort a single month. ARR, annual recurring revenue, is the same number multiplied by twelve.

What counts is recurring revenue only. One-time fees, setup charges and consulting are excluded, because the whole purpose of the metric is predictability.

The useful decomposition breaks a month’s change into new MRR from new customers, expansion from upgrades, contraction from downgrades, and churn from cancellations. Net new MRR is what remains. Two businesses with identical MRR growth can have completely different futures depending on how much of that growth is offsetting churn.

MRR is also the most cited number in indie software, which makes it the most casually misreported one. Common distortions: counting annual prepayments in the month they are received, counting trials, and counting gross revenue before refunds and payment fees.

It is a meaningful milestone number to include in a launch listing when it is real and dated. Lovable reached 100 million dollars ARR in eight months and doubled to 200 million by November 2025, which is the kind of claim that survives being quoted because the figure and the date travel together.