--- title: "What Is MRR? Definition and PM Examples" description: "Monthly recurring revenue, or MRR, is the predictable subscription revenue a company earns each month. See the formula and how the OKRs bootcamp teaches it." canonical_url: "https://builderscamp.com/guides/glossary/monthly-recurring-revenue" date_published: "2026-09-16" date_modified: "2026-09-16" author: "Andre Albuquerque" publisher: "Builders Camp" guide_class: "glossary" --- # What Is MRR? **TL;DR:** Monthly recurring revenue, or MRR, is the predictable subscription-based revenue a company can expect to earn each month from its active accounts, calculated as active subscribers multiplied by average revenue per account. It excludes one-time fees and free trial users, keeping the number tied to real, paying, recurring revenue. ## What does MRR mean? Monthly recurring revenue, or MRR, is the subscription-based revenue a SaaS company can expect to earn each month from its active accounts. Per [Stripe](https://stripe.com/resources/more/what-is-monthly-recurring-revenue), the formula is the number of active subscribers multiplied by the average revenue per account for that month, and it is important to use only recurring revenue rather than total revenue, which can include one-time fees, and to count only active, paying accounts rather than free trial signups. MRR is the base unit that [ARR](https://builderscamp.com/guides/glossary/annual-recurring-revenue) is built from, and it is the number most SaaS finance teams track month over month to catch a revenue problem long before it would show up in a slower moving annual figure. ## Why MRR matters for product managers How to Design OKRs treats MRR as exactly the kind of concrete number a key result should be built around, not a vague aspiration. The bootcamp's practical challenge centers on CodeForge, a company at 1.2 million dollars in MRR, where one of the original key results, written poorly, simply states "Increase MRR from 1.2M to 1.5M by June 30" without connecting it to the specific product work that would actually move that number. The bootcamp teaches PMs to work backward from an MRR target like this to the input metrics, like activation rate or expansion rate, that a product team can actually influence day to day, rather than treating a revenue number as a target the roadmap should somehow produce. ## MRR example In How to Design OKRs' practical challenge, CodeForge's 1.2 million dollar MRR sits alongside a real operational problem: activation rate has dropped from 42 percent to 31 percent in the same quarter, and two enterprise accounts already churned citing missing collaboration features. The exercise asks a PM to reconcile an MRR growth target with those specific, connected input metrics rather than treating the revenue goal in isolation. Writing a defensible key result here means naming the actual driver, such as reversing the activation rate drop or shipping the missing collaboration feature, that would plausibly move MRR from 1.2 million to 1.5 million, not just restating the revenue target itself as if naming it were the same as achieving it. ## How Builders Camp teaches MRR Builders Camp teaches MRR inside the [How to Design OKRs bootcamp](https://builderscamp.com/bootcamps/how-to-design-okrs), directed by Andre Albuquerque, using the CodeForge practical challenge to connect a revenue key result to the specific input metrics that actually drive it. Builders Camp runs live and self-paced bootcamps in product management and AI product building. [See the How to Design OKRs bootcamp](https://builderscamp.com/bootcamps/how-to-design-okrs) for the next cohort dates. ## Frequently asked questions ### How is MRR calculated? Multiply the number of active paying subscribers by the average revenue per account for that month, or divide total contract value by the contract length in months for each customer and sum the results. ### Does MRR include annual contracts? Yes, but normalized to a monthly figure. An annual contract's total value is divided across the months it covers so it can be compared consistently with monthly billed customers. ### Why is MRR considered the foundation of SaaS financial modeling? Because knowing MRR lets a company forecast future revenue, calculate growth rates, measure the impact of churn, and decide how much it can afford to spend acquiring new customers. ### What is the difference between MRR and ARR? MRR is the monthly figure; ARR is MRR multiplied by twelve, giving the annualized version of the same underlying recurring revenue base. ### Can MRR increase while customer count stays flat? Yes, through expansion revenue, existing customers upgrading or adding seats, which increases average revenue per account without adding a single new customer. ### Should free trial users be counted in MRR? No. MRR should only include active, paying accounts, since counting trial users who have not converted overstates the company's real recurring revenue. ## Sources - [Stripe: Monthly Recurring Revenue (MRR) Explained](https://stripe.com/resources/more/what-is-monthly-recurring-revenue) ## How this guide was made Researched from Builders Camp's bootcamp, track and masterclass material and the sources listed on this page, drafted with AI, and fact-checked against every source cited.