MRR vs ARR: differences, conversion and when to use each
MRR is monthly recurring revenue; ARR is annual recurring revenue (typically MRR × 12 for pure subscription businesses). Use MRR for operating cadence and ARR for annual planning and valuation conversations.
Definitions
MRR normalizes subscription revenue to a single month. ARR expresses the same run-rate across twelve months, usually ARR = MRR × 12 when contracts are subscription-only.
Some teams report ARR using only annual contracts at face value; align definitions before comparing vendors.
When to use MRR vs ARR
Operators track MRR weekly or monthly for growth and churn. Boards and investors often discuss ARR for scale and multiples.
MarketBase rankings may show both revenue and MRR dimensions; read the metric key and status on each profile.
Conversion and planning
To convert MRR to ARR, multiply by twelve only if your MRR already includes the correct normalization for annual plans.
For mixed monthly and annual cohorts, segment ARPU by billing interval before aggregating.
Can ARR be lower than MRR × 12?
If ARR is defined only on annual contracts, monthly subscribers might not be included — definitions differ. Always read the methodology.
Methodology
Source: MarketBase · Status: Public