MRR is the monthly equivalent of ARR — the total contracted monthly subscription revenue across all active customers. It is the preferred metric for companies billing monthly or tracking growth in shorter cycles. MRR is decomposed into new MRR (new customers), expansion MRR (upgrades), contraction MRR (downgrades), and churned MRR (cancellations) to give a complete picture of revenue momentum. MRR × 12 = ARR for annualized comparisons.