MRR/ARR capture the predictable recurring revenue a SaaS business earns monthly (annually).
Calculation
- MRR = sum of active paid subscriptions for the month - ARR = MRR × 12 (or sum of annual subscriptions)
Components
- **New MRR**: new sign-ups - **Expansion MRR**: plan upgrades, added seats - **Contraction MRR**: downgrades, seat reduction - **Churn MRR**: lost customers - **Net New MRR** = New + Expansion − Contraction − Churn
Why it matters
- Primary metric for investment rounds (especially post-Series A) - Basis for revenue forecast and burn-rate assessment - Product-Market Fit validation
Korea/Japan characteristics
- Korea: monthly billing preferred → MRR fluctuates more - Japan: annual contracts common → ARR is natural, churn stable
Tools
- **HubSpot / Salesforce**: basic ARR reports - **Stripe / Chargebee**: subscription ledger - **ChartMogul / Baremetrics**: MRR and churn specialists