MRR (Monthly Recurring Revenue) is the predictable subscription revenue a company collects each month. ARR (Annual Recurring Revenue) is that same figure annualized, MRR multiplied by 12, used as the standard growth metric for subscription businesses.
Both exclude one-time revenue like setup fees or a single large non-recurring contract, since the whole point of the metric is to isolate the predictable, repeating portion of revenue a business can actually count on next month or next year. A company shouldn't fold a one-time services deal into its MRR just to inflate the number.
Investors read MRR and ARR alongside growth rate and churn, since a company with flat MRR but heavy customer turnover underneath it is in a very different position than one with the same MRR and low churn. The headline number alone doesn't say much without those two figures next to it.
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