MRR (Monthly Recurring Revenue) is the central financial metric for any subscription-based mobile app. It sums all active subscription revenue normalized to a monthly basis: a $9.99 / month subscription counts as $9.99 in MRR; an annual plan at $59.99 / year counts as $5.00 in MRR ($59.99 ÷ 12). MRR is the cleanest signal of subscription-business health because it isolates recurring revenue from one-time IAP revenue or ad revenue.
The MRR growth equation
Net MRR change = New MRR + Expansion MRR − Churned MRR − Downgrade MRR
- New MRR: revenue from brand-new subscribers added this month.
- Expansion MRR: existing subscribers upgrading to higher tiers, or paying for add-ons.
- Churned MRR: revenue lost from subscribers who cancelled.
- Downgrade MRR: revenue lost from subscribers moving to a cheaper tier.
Breaking out these components shows whether growth is acquisition-driven (new dominant) or retention-driven (low churn). The healthiest subscription businesses see balanced growth across all four — strong new acquisition, expansion via upgrades, low churn, minimal downgrades.
MRR cohort analysis: track each cohort's MRR over time — what fraction of the starting MRR is still active 1 month later, 6 months, 12 months. Healthy subscription apps see cohort MRR plateau at 50-70% of starting MRR within 6-12 months (the asymptotic retention plateau). Cohort curves that decline continuously past 12 months indicate weak product-market fit.
Gross vs Net MRR — pricing clarification
- Gross MRR: revenue billed by Apple / Google before their 15-30% commission. The number Apple / Google report in App Store Connect / Play Console.
- Net MRR: revenue you actually keep after commission. For subscription apps, this is what funds your operations.
Mature subscription businesses report both: gross for cohort-quality analysis (commission-agnostic), net for capital allocation. Most VC pitch decks show gross; most CFO dashboards show net.
MRR vs ARR
- MRR is the monthly view. Standard metric for subscription mobile apps.
- ARR (Annual Recurring Revenue) = MRR × 12. Annualized view, common in B2B SaaS, less common in consumer subscription mobile.
Consumer mobile subscription apps usually report MRR; ARR appears more in business-tier or productivity-tier mobile apps that share metrics with B2B SaaS peers.