Definition
What MRR measures
Monthly Recurring Revenue (MRR) is the normalized monthly value of every active subscription on a given date. For a subscription app with both monthly and annual plans, MRR converts everything to a comparable monthly equivalent so you can read one number and understand revenue health.
The simplest formula:
MRR = sum of (subscription price / billing period in months) for every active subscription
A $9.99 monthly subscription contributes $9.99 to MRR. A $79.99 annual subscription contributes $6.67 to MRR ($79.99 / 12). A six-month plan at $39.99 contributes $6.66 to MRR.
Why MRR matters for mobile subscription apps
MRR is the most-watched metric for subscription health because it:
- Updates immediately when users sign up, upgrade, downgrade, or cancel
- Lets you compare month-over-month growth without smoothing distortions
- Decomposes cleanly into new MRR, expansion MRR, contraction MRR, and churned MRR
- Pairs naturally with churn rate to compute LTV
For an indie subscription app, MRR is usually the primary north-star metric, with ARR (12x MRR) reported alongside for board updates and annualized framing.
How MRR breaks down
The standard decomposition each month:
- New MRR. First-time paid subscriptions added this month.
- Expansion MRR. Existing subscribers upgrading to a higher tier or buying additional products.
- Contraction MRR. Existing subscribers downgrading to a lower tier (negative number).
- Churned MRR. Subscriptions cancelled this month (negative number).
- Reactivation MRR. Previously churned users who returned.
Net MRR change for the month is the sum. Most subscription dashboards (RevenueCat, Adapty, ChartMogul) expose this breakdown.
How is MRR calculated for a mobile app with annual plans?
Divide each annual subscription's price by 12, sum across all active subscriptions:
- A $99 annual plan contributes $8.25 to MRR
- A $9.99 monthly plan contributes $9.99 to MRR
- A $59.99 six-month plan contributes $9.998 to MRR ($59.99 / 6, normalized to monthly)
Do not multiply annual revenue by 12 again when computing MRR. The whole point of MRR is the normalized monthly view.
What is the difference between MRR and revenue?
MRR is forward-looking: it tells you what you would book this month if nobody signed up or cancelled. Recognized revenue is backward-looking and follows accounting rules (annual plans recognize $1/12 of the price each month even though Apple paid you the full amount up front, net of commission).
MRR ignores Apple and Google's 15-30% commission unless you specifically compute net MRR. Most reports use gross MRR (the user-facing subscription price) as the default.
How localized pricing affects MRR
Localized pricing changes the per-country price the user pays in their local currency. MRR is usually reported in USD (or your reporting currency), so the impact on MRR depends on FX:
- Lower local prices in emerging markets reduce per-user MRR contribution in USD terms
- Volume usually grows enough to offset the per-user drop
- Total MRR typically goes up after PPP-style localization in lower-income markets
RevenueCat's State of Subscription Apps data consistently shows this pattern.
Examples
Mixed-plan MRR calculation
A subscription app with monthly and annual variants:
| Plan | Price | Active users | Per-user MRR | Plan MRR |
|---|---|---|---|---|
| Monthly basic | $9.99 | 800 | $9.99 | $7,992 |
| Annual basic | $79.99/yr | 200 | $6.67 | $1,334 |
| Monthly pro | $19.99 | 150 | $19.99 | $2,999 |
| Annual pro | $159.99/yr | 100 | $13.33 | $1,333 |
| **Total** | **1,250** | **$13,658** |
Total MRR is $13,658. ARR would be 12x that, roughly $163,896. Annual plans contribute less to MRR per user even when their annualized price is higher because of the up-front billing.
Frequently asked
What is Monthly Recurring Revenue in simple terms?
MRR is the total normalized monthly revenue from all active subscriptions. Monthly plans contribute their full price, annual plans contribute 1/12 of their price. The result is one comparable monthly number across all plan types.
How is MRR different from ARR?
Same metric on different time scales. ARR is 12x MRR mechanically. MRR moves immediately with month-to-month changes; ARR smooths volatility. Mixed monthly/annual subscription apps usually report both, with MRR as the operational metric and ARR for board updates.
Does MRR include trials?
No. MRR only counts active paying subscribers. Trials in progress are excluded because they have not paid. Once a trial converts to paid, the new subscription contributes to MRR from that day forward.
Should MRR be gross or net of store commission?
Most reports use gross MRR (the user-facing subscription price) by default. Net MRR subtracts Apple's or Google's 15-30% commission. For internal capacity planning, use net. For external comparisons and benchmarks, gross is the convention.
Further reading
- Localized Pricing 101 for Subscription AppsLocalized pricing sets country prices intentionally so subscriptions feel fair and convert across markets, not just currency-converted.
- I Read All 336 Pages of RevenueCat's State of Subscription Apps 2026 Report (So You Don't Have To)10 pricing and localization takeaways from RevenueCat SOSA 2026, explained for busy mobile app operators who ship subscriptions on App Store and Google Play.
- Real Localized Pricing: PPP Baselines + Prices That Feel LocalStore auto-conversion is currency math. Real localization is PPP-style baselines + rounding rules that land in familiar thresholds.