Added by NikkiElizDemere 5 years ago in
Your monthly or annual recurring revenue (MRR and ARR for short) is one of the primary reason we're all in SaaS. Recurring revenue means our growth can compound and through this momentum we can ensure we're always improving and building something beautiful. Yet, we've found that even though this momentum metric is seemingly simple to calculate, a lot of SaaS companies are calculating their MRR incorrectly. In fact, we recently found in a poll of 50 SaaS companies than 2 out of 5 were including or discluding something they shouldn't be in their calculations. Not calculating your MRR/ARR correctly can cause you to lie to your investors/team/advisors or worse: misjudge the true health and trajectory of your business. So let's take a look deeper into why MRR/ARR is important, how to calculate it, and most importantly how to optimize it so that you are getting the truest picture of the health of your SaaS company.
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