MRR & ARR

MRR (Monthly Recurring Revenue) and ARR (Annual Recurring Revenue) are the core metrics for subscription businesses.

When should I read this?

Read this if you need to understand how Floatless calculates these metrics, or how to interpret your revenue dashboard.

What is MRR?

Monthly Recurring Revenue is the predictable revenue you expect each month from active subscriptions.

MRR = Sum of all active subscription values, normalized to monthly

Examples

Subscription Value MRR Contribution
$99/month $99 $99
$999/year $999/12 $83.25
10 seats × $15/seat/month $150 $150

What is ARR?

Annual Recurring Revenue is MRR multiplied by 12.

ARR = MRR × 12

ARR is useful for:

  • Comparing to annual contracts
  • Board/investor reporting
  • Valuation benchmarks

MRR components

Floatless breaks down MRR changes:

Component Description
New MRR From new customers this period
Expansion MRR Upgrades and add-ons
Contraction MRR Downgrades and removals
Churned MRR Lost from cancellations
Net New MRR New + Expansion - Contraction - Churned

What's included in MRR

✓ Included:

  • Active subscriptions
  • Recurring add-ons
  • Committed usage fees

✗ Not included:

  • One-time charges
  • Unpaid invoices
  • Variable usage (until billed)

Viewing MRR in Floatless

  1. Go to Dashboard → Revenue
  2. View current MRR and trend
  3. Break down by MRR component
  4. Filter by date range

Best practices

  • Track Net New MRR — overall business health
  • Watch churn rate — MRR lost / total MRR
  • Segment analysis — MRR by plan, cohort, geography

Next steps

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