Monthly recurring revenue and supporting figures
Annual subscription prices are normalized to one month rather than counted as revenue only in their billing month. Average revenue divides normalized MRR by active accounts; it is zero when no accounts are entered.
To compare actual monetary investment costs and proceeds separately from recurring run rate, use the ROI Calculator with the relevant reporting amounts.
The formula
Annual subscription prices are normalized to one month rather than counted as revenue only in their billing month. Average revenue divides normalized MRR by active accounts; it is zero when no accounts are entered.
Worked monthly recurring revenue example
One hundred accounts at 50 monthly generate 5,000 MRR. Twenty annual accounts at 480 contribute another 800 normalized MRR. Total MRR is 5,800 and annual recurring run rate is 69,600.
How to use this calculator
- Enter active monthly-plan accounts, monthly recurring price per account, active annual-plan accounts.
- Set annual recurring price per account using the stated units or choices.
- Calculate and compare monthly recurring revenue, annual recurring run rate, active account total, average normalized monthly revenue per account.
Choosing inputs for monthly recurring revenue
MRR describes a recurring revenue run rate, not cash collected in a month. A customer paying an annual bill contributes one-twelfth of the annual recurring price to normalized monthly revenue, even if the cash receipt occurs all at once. This makes mixed billing intervals easier to compare.
Enter active paying accounts and the recurring price after discounts that belong in your chosen MRR definition. One-time setup fees, taxes, and nonrecurring usage charges should not be mixed into the fixed recurring prices here. Each account is assigned to one plan group so it is not counted under both monthly and annual totals.
Interpreting monthly recurring revenue
Annual recurring run rate multiplies the current MRR by twelve and assumes the current account and price mix persists. It is not recognized annual revenue or a guaranteed forecast. Renewals, cancellations, upgrades, changing discounts, and new customers can move the run rate before the year ends; this calculation is a snapshot of the two entered plan groups.
Assumptions & limitations
What this calculation assumes
- Each account belongs to one group and account counts are whole numbers.
- Plan prices are recurring amounts in one currency.
What to keep in mind
- Usage-based billing, multiple prices within a group, churn forecasts, revenue recognition, tax, and one-time fees are excluded.
Common questions
Is annual recurring run rate the same as recognized revenue?
No. It annualizes the current monthly recurring snapshot without applying accounting recognition rules.
Can I enter only annual plans?
Yes. Set monthly-plan accounts to zero; annual prices are still divided by twelve for MRR.
Are setup charges recurring revenue?
One-time setup charges are excluded from the fixed recurring plan prices in this tool.
Sources & further reading
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