Definition · also called monthly recurring revenue
MRR (monthly recurring revenue) is the revenue a subscription business can expect to collect every month from its active paying customers, with every plan converted to a monthly amount. A $29/month plan adds $29 of MRR. A $290/year plan adds $24.17 ($290 ÷ 12), even though the customer paid once.
MRR is a run-rate, not an accounting number. It tells you how big the subscription engine is today, which is why indie SaaS makers quote it far more often than revenue, profit or cash in the bank.
MRR formula
MRR = sum of the monthly value of every active paid subscription
- Shortcut: MRR = paying customers × ARPU (average revenue per user per month).
- Annual and multi-year plans: divide the price by the number of months they cover.
- Discounts: use what the customer actually pays, not the list price.
- Leave out: one-time fees, setup fees, lifetime deals, refunds, sales tax/VAT, free users and trials that haven't converted.
Worked example
A small SaaS has 120 customers on a $19/month plan, 30 customers on a $190/year plan and sold 40 lifetime deals at $299 last month.
- Monthly plans: 120 × $19 = $2,280
- Annual plans: 30 × $190 ÷ 12 = $475
- Lifetime deals: $11,960 of cash, but $0 of MRR
MRR = $2,280 + $475 = $2,755, which is an ARR of $33,060. The lifetime-deal cash is real money in the bank, but it doesn't repeat, so it stays out of MRR.
The five MRR movements
Total MRR hides what is going on underneath. Every month MRR moves for five reasons, and tracking them separately is what tells you whether to work on acquisition, pricing or retention:
- New MRR: first payments from new customers.
- Expansion MRR: existing customers upgrading, adding seats or usage.
- Reactivation MRR: former customers coming back.
- Contraction MRR: existing customers downgrading.
- Churned MRR: customers who cancelled or whose payment failed for good.
Net new MRR = new + expansion + reactivation − contraction − churned. If you add $3,000 of new MRR but lose $2,400 to churn, you only grew $600, and that is a churn problem, not a marketing problem.
What MRR is not
- Not revenue in the accounting sense. Annual prepayments land as cash on day one but count as MRR over twelve months.
- Not profit. A $10K MRR product with $6K of monthly AI-API costs is a very different business from a $10K MRR product with $300 of server bills.
- Not “monthly revenue”. Many founders on X post “$20K MRR” when they mean total sales that month, including one-time purchases, templates or info products. When you compare yourself with others, check what is being counted. Services like TrustMRR verify figures by connecting directly to the payment provider.
On IndieMakerList we store revenue exactly as each maker reported it and label the period (monthly, annual, lifetime), so a $5K one-off month is never presented as $5K MRR.
MRR in practice: how indie makers use it
For indie makers MRR is the scoreboard. It is the number they set public goals on, the one that decides when they can quit a job, and the one buyers price a business on. Real milestones from the directory:
Quit his job in March 2018 and gave himself one “Hardcore Year” to reach $1,000 MRR. He got there in May 2019, about 14 months later, after launching a stream of small products in public. (source: indiehackers.com)
Built Bidsketch on nights and weekends while employed, reached $1K MRR about three months after leaving beta in 2010, and quit once MRR replaced his salary. (source: saasclub.io)
ScreenshotOne made $7 MRR in July 2022. Shared figures put it at about $2.2K in February 2023, $13.6K in January 2025 and about $36K MRR in September 2026: slow, then compounding. (sources: indiehackers.com, x.com)
Senja (with Wilson Wilson) got its first paying customer in June 2022, hit $1K MRR that December, $10K MRR in August 2023 and $50K MRR in October 2024. (source: indiehackers.com)
Documented Bannerbear's path to $10K MRR, which it crossed in January 2021 as a one-person API business. (source: bannerbear.com)
A pricing change took MentorCruise from about $600 to $4,200 MRR within months in 2020, a reminder that ARPU moves MRR as much as customer count does. (source: starterstory.com)
SiteGPT reached roughly $10K MRR in its first month in 2023, then lost about half of those customers before recovering. Launch-spike MRR is not the same as retained MRR. (source: superframeworks.com)
See every dated revenue point on maker journeys and the self-reported figures on the revenue leaderboard.
From our data: how long indie makers took
| Milestone | Makers who reached it | Median time (dated makers) | Middle half |
|---|---|---|---|
| $1K MRR | 112 | < 1 yr (n=22) | < 1 yr – 1 yr |
| $10K MRR | 97 | 1 yr (n=15) | < 1 yr – 2 yrs |
| $1M ARR | 49 | 3 yrs (n=13) | 1 yr – 4 yrs |
| $100K MRR | 40 | 3 yrs (n=9) | 2 yrs – 4 yrs |
Years from the year a maker started to the first year a self-reported figure reached each level. Medians use only makers whose crossing year is pinned down. Full method and every data point: maker journeys.
From our data: what indie makers report earning
Median reported: $22K/month
- $1K+/month88%
- $10K+/month65%
- $100K+/month23%
- $1M+/month3%
165 of 868 active makers in the directory publicly report revenue, converted to a monthly figure; it includes non-subscription income, so treat it as monthly revenue, not strictly MRR. Makers who report tend to be the successful ones. See the revenue leaderboard and the 2026 report.
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Frequently asked questions
What does MRR stand for?
MRR stands for monthly recurring revenue: the predictable subscription revenue a business expects each month from its active paying customers, with annual plans divided by 12.
How do you calculate MRR with annual plans?
Divide the annual price by 12 and add it to MRR for every month the plan is active. A $240/year customer adds $20 of MRR, even though you received $240 at once.
Do one-time payments and lifetime deals count toward MRR?
No. One-time purchases, setup fees and lifetime deals do not repeat, so they are excluded from MRR. Track them separately as one-time revenue.
Is MRR the same as monthly revenue?
No. Monthly revenue includes everything you sold that month, including one-time sales, and follows accounting rules for annual prepayments. MRR only counts normalized, recurring subscription value.
What is a good MRR for an indie SaaS?
There is no universal number. Common milestones are $1K MRR (proof people pay), enough MRR to cover your living costs (ramen profitable), and $10K MRR, which many solo makers treat as a full-time income.
Related terms
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Maker examples are paraphrased from the cited sources and from each maker's IndieMakerList profile; revenue is self-reported unless marked verified. Spotted an error? Tell us.