New MRR
Definition
New monthly recurring revenue, or New MRR, is a metric that measures the amount of revenue that a company can reasonably expect to add to it’s Existing MRR on a monthly basis. This metric is important for companies to track because it provides insight into the health of the business and its ability to grow through new customer acquisition.
New MRR is simply a measure of the revenue that your business has added in the current month to its existing MRR. This could be from subscriptions, membership fees, or any other type of recurring revenue stream. New MRR is important to continually monitor because it provides a stable and predictable income that can be used to finance growth and expansion.
How is New MRR calculated?
New monthly recurring revenue includes all of the revenue that is added to existing MRR in the current period. This includes recurring revenue from subscription plans, one-time fees, and other recurring revenue streams.
The formula for calculating New MRR is:New MRR = Sum of all recurring charges where the customer has a charge this month, but not in the any previous month.
Example:
Last month you sent 50 invoices to recurring subscription customers. Each of the invoices have a single line item / charge for $99. This month you sent 60 invoices, with the same single charge.
You check every previous charge and invoice your business has raised and find that none of the additional 10 charges were for a customer that has been invoices before, so none of these are for Reactivated customers.
Therefore, the 10 new charges of $99 are added together to make $990 of New MRR.
Does New MRR include all new charges this month?
Not quite. New MRR is specifically a sum or charges in a month where:
The customer was not active previously (therefore they would classified in Reactivation MRR)
The additional MRR is for a new customer, not an existing customer
New MRR does not include one-off charges, setup fees or contracted future revenues.
