Monthly Recurring Revenue (MRR)

Understanding MRR Components

MRR isn't just one number—it's the sum of several components that tell different stories about your business health. Breaking down MRR helps you understand where growth is coming from and where you're losing revenue.

• New MRR: Revenue from new customers acquired this month
• Expansion MRR: Additional revenue from existing customers (upgrades, add-ons)
• Churned MRR: Revenue lost from customers who cancelled
• Contraction MRR: Revenue lost from downgrades
• Reactivation MRR: Revenue from customers who returned

How to Calculate Net New MRR

Net New MRR shows your actual monthly growth by combining all components:

Common MRR Mistakes to Avoid

• Including one-time fees: Setup fees, consulting, or training should not be in MRR
• Counting unpaid invoices: Only count revenue when payment is received or highly certain
• Ignoring failed payments: Dunning failures should reduce your MRR
• Mixing currencies: Convert all subscriptions to a base currency consistently
• Counting free trials: Only count when the trial converts to paid

When to Focus on MRR

MRR becomes your north star metric when you have a subscription or recurring revenue model. For early-stage startups, focus on MRR growth rate (aim for 15-20% month-over-month). As you scale past €100k MRR, shift focus to Net Revenue Retention and unit economics.

MRR Health Check Indicators

• Signs of Healthy MRR: Net New MRR growing month-over-month, expansion MRR exceeds churned MRR, low involuntary churn (failed payments), new MRR consistent or growing
• Warning Signs: Flat or declining MRR for 3+ months, expansion MRR shrinking, increasing involuntary churn, higher downgrades than upgrades, new MRR declining while spend increases
• Red Alert: Net New MRR negative for 2+ months, customers cancelling due to product issues not pricing, expansion MRR near zero, sales team missing targets while marketing costs rise

Tools for Tracking MRR in Germany

German SaaS companies have several excellent options for MRR tracking. ChartMogul provides comprehensive subscription analytics with European data handling compliance. Baremetrics offers integration with German payment processors like Stripe and offers local hosting. The Stripe Dashboard itself is sufficient for small teams but lacks sophisticated cohort analysis. Many German companies prefer ChartMogul for its GDPR-friendly approach and deep revenue analytics tailored to B2B SaaS. Profitwell (now part of Paddle) integrates well with local payment methods common in German SMEs.

MRR Targets by Company Size

• Solo Founder/Freelancer: €500-2,000 MRR is a first win. Focus on reaching €5,000 MRR (enough for basic living expenses in Germany)
• Small Team (2-5 people): €5,000-20,000 MRR is the validation phase. Growth target: 20% MoM. At €10,000+ you can hire your first full-time employee
• Growing Team (5-20 people): €20,000-100,000 MRR is scale mode. Growth target: 15% MoM. Churn should be declining as product improves
• Scaling Company (20+ people): €100,000+ MRR requires disciplined unit economics. Growth target: 10% MoM. Focus on NRR > 120% and CAC payback < 12 months