ARR vs MRR
What is the difference between ARR and MRR? Side-by-side definitions, formulas, and benchmarks for two of the most-watched SaaS metrics.
Definitions
What is ARR?
ARR is annual recurring revenue, the annualized subscription revenue base of a SaaS company.
What is MRR?
MRR is monthly recurring revenue, the normalized monthly subscription revenue base of a SaaS company.
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ARR vs MRR at a Glance
| ARR | MRR | |
|---|---|---|
| Category | Metrics | Metrics |
| Formula | ARR = MRR × 12 | MRR = Paying Customers × ARPA |
| Benchmarks | — | — |
| Calculator | ARR calculator | MRR calculator |
When Each Matters
ARR and MRR answer different questions. ARR is annual recurring revenue, the annualized subscription revenue base of a SaaS company. MRR is monthly recurring revenue, the normalized monthly subscription revenue base of a SaaS company. In practice, healthy SaaS operators watch both, because each one catches failure modes the other misses.