Monthly Recurring Revenue (MRR) is your predictable monthly revenue based on the number of subscribers for each subscription plan. MRR calculations take into consideration subscribers from dissimilar subscription plans offered at different price points and aligns them to provide a single, recurring revenue figure.
We take the latest invoice amount of each customer with active subscription access (which consists of those end-users with statuses of active and pending cancellation who still have access to their subscription until the end of the billing cycle) then we divide by amount of days in their subscription period.
From there, we multiply daily recurring revenue on the average amount of days in the month during the year (30.42 days).
MRR is designed to align subscribers based on the amount of revenue each month and is the most accurate way to predict recurring revenue when there are subscribers paying different rates.
MRR is helpful for reporting growth, analyzing trends, and planning for the future.