MRR helps SaaS companies understand the stability and growth of their revenue stream.
Monthly Recurring Revenue (MRR) is the predictable, recurring revenue that a company can expect to receive each month from its subscription-based products or services. It is an important metric for SaaS (Software as a Service) companies, as it helps them understand the stability and growth of their revenue stream.
To calculate MRR for a SaaS company, you will need to know the following:
Number of paying customers: This is the total number of customers who are currently paying for the company's product or service.
Average revenue per user (ARPU): This is the average amount of money that each customer pays per month.
Once you have these numbers, you can use the following formula to calculate MRR:
MRR = Number of paying customers * ARPU
For example, if a SaaS company has 100 paying customers and an ARPU of $100, their MRR would be:
MRR = 100 * $100 = $10,000
This means that the company can expect to receive $10,000 in recurring revenue each month.
It's important to note that MRR can be affected by changes in the number of paying customers and the ARPU, so it's important to track these metrics over time in order to understand the overall trend of MRR.
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