What is MRR (monthly recurring revenue)?
How do you calculate MRR?
MRR = the sum of the monthly value of every active subscription
Convert each subscription to a monthly amount first:
- Monthly: the price per order.
- Every 2 weeks: price × 26 ÷ 12.
- Every 3 months: price ÷ 3.
- Prepaid for 6 monthly deliveries: the amount paid ÷ 6.
Leave out one-time add-ons, shipping and taxes; they aren’t recurring subscription revenue.
Example (made-up numbers): a shop has three kinds of active subscriptions.
| Subscriptions | Price per order | Monthly value |
|---|---|---|
| 300 monthly | €25 | 300 × €25 = €7,500 |
| 100 every 2 weeks | €12 | 100 × €12 × 26 ÷ 12 = €2,600 |
| 60 every 3 months | €60 | 60 × €60 ÷ 3 = €1,200 |
MRR = €7,500 + €2,600 + €1,200 = €11,300.
Why does MRR matter?
MRR shows the size of a subscription business in one number that doesn’t jump around with billing dates. Billed revenue swings with a month of five Fridays, a batch of quarterly renewals or many skips. MRR smooths that out and shows the trend underneath: new subscriptions add to it, cancellations and downgrades take from it.
If MRR stays flat although new subscriptions keep coming, cancellations are eating the growth. Watch the two side by side: when they’re about equal, any dip in new sign-ups turns flat into shrinking.
How does Zubs relate to MRR?
The Zubs analytics dashboard shows subscription revenue per month: what subscription orders billed in that month, next to regular sales. That’s billed revenue, not MRR. Skipped orders are missing from it, and quarterly renewals land in a single month. To follow what drives MRR, watch active subscriptions, new subscriptions and cancellations, which the dashboard shows too. Fewer cancellations is the most direct lever; see the cancellation offers playbook.
Bottom line
MRR = the monthly value of all active subscriptions, normalized by delivery interval. It’s a planning number; billed subscription revenue, which Zubs shows, is the cash number. Track both and don’t swap them.
Frequently asked questions
- What's the difference between MRR and revenue?
- Revenue is what you billed. MRR is what your active subscriptions are worth per month, whenever they bill.
- Do discounts count in MRR?
- Yes. Use the price the subscriber actually pays per order, after the subscription discount. A temporary discount, such as an introductory one, lowers MRR only while it applies.
- How do prepaid subscriptions count?
- Spread the prepaid amount across the months it covers. A €102 payment for six monthly deliveries counts as €17 a month.
- Does a paused subscription count in MRR?
- Most businesses leave it out while it's paused, because it isn't bringing in revenue. Decide once and stay consistent.