If you're building a subscription product, you'll hear "MRR" constantly. It stands for monthly recurring revenue, and it's the number that defines whether your business is healthy.
Here's everything you need to know.
The definition
MRR is the total predictable revenue your business generates each month from active subscriptions.
The key word is predictable. MRR excludes one-time payments, setup fees, and anything that won't recur next month.
How to calculate MRR
For a simple subscription product:
MRR = number of subscribers × average monthly revenue per subscriber
If you have 50 customers paying $20/month, your MRR is $1,000.
For annual plans, divide by 12:
$240/year ÷ 12 = $20/month contribution to MRR
The components of MRR
Real MRR tracking splits into four buckets:
- New MRR — revenue from new customers this month
- Expansion MRR — upgrades and add-ons from existing customers
- Contraction MRR — downgrades from existing customers
- Churned MRR — revenue lost from cancelled subscriptions
Net New MRR = New MRR + Expansion MRR − Contraction MRR − Churned MRR
When Net New MRR is positive, you're growing. When it's negative, you're shrinking even if you're acquiring new customers.
Why indie hackers track MRR publicly
For bootstrapped founders, MRR is the score on the board. Unlike VC-funded startups that optimize for growth at all costs, indie hackers are building toward profitability. MRR tells them when they've made it.
Sharing that number publicly — on leaderboards like MRR.fyi — creates accountability and community. When you're building alone, having a public number to defend is surprisingly motivating.
MRR milestones that matter
- $1K MRR — proof the idea works
- $10K MRR — enough to replace a salary in many countries
- $50K MRR — serious business, lifestyle supporting
- $100K MRR — "ramen profitable" is an understatement
These aren't universal, but they're the markers indie hackers celebrate. You'll see all of them on the leaderboard.