Means monthly recurring revenue. MRR is a measure of revenue components that are recurring in nature. It should exclude one-time (non-recurring) fees and professional service fees.

Often, people will multiply one month’s all-in bookings by 12 to get to ARR. Common mistakes with this method include: (1) counting non-recurring fees such as hardware, setup, installation, professional services/ consulting agreements; (2) counting bookings (see bookings definition). Bookings are not revenue, but a promise of revenue. 

Did this answer your question?