Finding customers and growing
MRR and ARR
MRR, short for monthly recurring revenue, is the subscription money you expect to collect every month from your current customers, and ARR, short for annual recurring revenue, is that number times twelve, so an MRR of 1,000 means an ARR of 12,000.
Also called monthly recurring revenue, ARR, annual recurring revenue
Looking this up for a class, a job, or something you want to build? If it is the last one, nommi reads your idea before you spend months on it.
Both leave out one-time charges and spread annual plans across their months. Both are run rates, a snapshot of today's pace, not cash in the bank. Most other growth numbers, like churn, the share of customers or revenue you lose each month, are measured against them.
At a glance
| MRR | ARR | |
|---|---|---|
| Stands for | Monthly recurring revenue | Annual recurring revenue |
| Period | One month | One year: MRR times twelve |
| Leaves out | One-time charges | One-time charges |
| What it is | A run rate, not cash in the bank | A run rate, not cash in the bank |
What recent High Alpha data says
In High Alpha's 2025 survey, the median SaaS company under 1 million US dollars of ARR doubled its ARR in a year.
- Median yearly ARR growth, under 1 million US dollars of ARR: 100% (top quarter 300%).
- Median yearly ARR growth, 1 million to 5 million US dollars of ARR: 50% (top quarter 100%).
Source: High Alpha, 2025 SaaS Benchmarks Report. More than 800 SaaS companies surveyed, 69% in the US, not all startups. As of 5 November 2026.
When this shows up
Example, not a real founder: you sell a few annual plans in your launch month and report the full amount as that month's revenue. The next month looks like a collapse. Spread across the year, your MRR barely moved.
What to do next
List every active subscription with its monthly value, splitting annual plans across their months. The total is your MRR today.
Go deeper
Flat for months. Should you pivot or keep pushing?
A read on whether people find, use, return to and pay for your product, or a note when there is too little to judge.
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