Monthly Recurring Revenue is the single most-tracked metric in modern SaaS because it converts messy invoicing reality — annual upfront contracts, multi-year discounts, mid-month upgrades — into one predictable number. A Swiss CHF 12,000 yearly contract signed on 14 March contributes CHF 1,000 to MRR from the day it activates, not a CHF 12,000 spike that distorts the month.
MRR is the input to almost every downstream SaaS metric: ARR (×12), growth rate, churn, LTV, CAC payback and runway. Investors price European SaaS rounds in 2026 at roughly 5–8× ARR for sub-CHF 10M businesses growing 40%+ year-on-year, which puts every CHF 1,000 of new MRR worth CHF 60,000–96,000 of enterprise value.
Five components make up the full MRR walk each month: starting MRR + new (new logos) + expansion (upsells, seat adds) − contraction (downgrades) − churn (cancellations) = ending MRR. Most boards want this decomposition, not just the headline number.
MRR = Σ (monthly value of every active subscription) Net New MRR = New + Expansion − Contraction − Churn
Example: A Zurich SaaS starts January with CHF 42,000 MRR. It signs five new customers worth CHF 3,500/mo, expands three existing ones by CHF 1,200/mo, downgrades one by CHF 400 and loses two worth CHF 900/mo. Ending MRR = 42,000 + 3,500 + 1,200 − 400 − 900 = CHF 45,400. Net new MRR = CHF 3,400 (8.1% monthly growth).
Monthly Recurring Revenue: The Complete Definition
Monthly Recurring Revenue captures only contracted, repeatable subscription revenue. One-off implementation fees, professional-services hours, hardware sales and overage usage are explicitly excluded — they inflate the number and break comparability with peers. If a CHF 50,000 annual deal includes a CHF 10,000 setup fee, only CHF 40,000/12 = CHF 3,333/mo enters MRR.
Multi-year contracts must be normalised to monthly value at the discounted rate the customer is actually paying. A three-year deal at CHF 30,000/year contributes CHF 2,500 MRR, regardless of whether the customer paid CHF 90,000 upfront. The cash sits on the balance sheet as deferred revenue and is recognised over the contract term — see also accrual accounting.
How to Calculate MRR: Formula and Example
The base calculation is mechanical: list every active subscription, convert to its monthly value, and sum. The interesting work is the MRR movement (also called the 'MRR walk'), which decomposes change into the five drivers above. Most billing platforms (Stripe Billing, Chargebee, Recurly) expose this natively; spreadsheets become unusable above ~200 customers.
A worked example with CHF amounts: a 40-customer SaaS with average plan CHF 1,200/year has MRR = 40 × 100 = CHF 4,000. Add a CHF 600/mo enterprise tier customer → CHF 4,600. Lose a CHF 100/mo customer → CHF 4,500. Annualised, that's CHF 54,000 ARR.
MRR in Switzerland, Germany, France and Italy
MRR is a non-GAAP metric, so it is not regulated by Swiss CO, German HGB, French PCG or Italian OIC accounting standards — it lives in management reporting alongside the statutory P&L. That said, VAT treatment differs: Swiss VAT on SaaS is 8.1% (2026), Germany 19%, France 20%, Italy 22%. MRR is always reported net of VAT.
Currency mix matters for cross-border SaaS. A Swiss vendor selling EUR contracts to Germany should report MRR in CHF at a stable internal FX rate (typically the month-average ECB rate) and disclose the policy. Investors in Zurich, Berlin and Paris all expect MRR walks in one reporting currency with FX impact shown as a separate line.
Why MRR Matters for Your SaaS Business
MRR is the heartbeat metric for any subscription business because it tells you, in real time, whether the company is growing or shrinking. Cash and statutory revenue lag by weeks; MRR moves the day a contract is signed or churned. Operationally, MRR drives quota setting for sales reps, the discount rate finance allows, and the hiring plan for customer success.
Strategically, MRR is what investors and acquirers value. The MyEuroCalculator MRR Calculator projects MRR forward 12 months under your assumed new-customer rate, churn and ARPU — useful before a funding round to test whether the plan is realistic.
MRR vs ARR: Key Differences
MRR and ARR are the same metric expressed at different cadences. ARR = MRR × 12 by convention, even though annual billing flips the cash mechanics. Boards in Europe tend to look at ARR for headline reporting (it matches investor multiples) and at MRR for operational decisions (it reacts faster to churn and expansion).
MRR conventions by country (2026)
| Country | Statutory equivalent | VAT to exclude | Typical board cadence |
|---|---|---|---|
| Switzerland | Umsatzerlöse (CO art. 959b) | 8.1% | Monthly |
| Germany | Umsatzerlöse (HGB §275) | 19% | Monthly |
| France | Chiffre d'affaires (PCG) | 20% | Monthly + quarterly |
| Italy | Ricavi delle vendite (OIC 12) | 22% | Monthly |
Common mistakes
Setup, training and implementation fees are not recurring — putting them in MRR overstates growth and breaks the ARR multiple investors apply.
An annual prepayment is still recurring; divide by 12 and book the rest as deferred revenue on the balance sheet.
Reporting only ending MRR hides whether growth came from new logos or expansion. The five-component decomposition is what boards actually want.
Letting EUR and CHF deals translate at spot every month adds noise that looks like churn. Lock an internal rate per quarter.