MSP KPI Definition
MSP Monthly Recurring Revenue (MRR): Definition & Formula
Monthly recurring revenue is the monthly normalized value of recurring services. MSP Fuel uses the planner’s MRR bucket for managed-services recurring revenue and separates other recurring revenue (ORR), project labor and one-time product sales. Illustrative example: $100,000 opening MRR plus $5,000 new-client MRR and $2,000 expansion less $3,000 lost MRR leaves $104,000. MRR is a recurring run-rate measure, not cash collected that month.
By MSP Fuel · Examples are illustrative.
Target interpretation
Context matters
Set the target against your service scope and company plan.
Formula
Closing MRR = opening MRR + new-client MRR + expansion MRR − contraction MRR − churned MRR
Why it matters
The recurring base anchors growth, capacity and margin planning.
A bridge of additions and losses explains changes more clearly than one closing total.
Common mistakes
Counting annual invoices in full rather than normalizing the recurring service period.
Putting project labor or one-time product revenue into MRR.
Mixing recurring revenue buckets with different delivery cost structures.
What moves the number
Reconcile agreements and revenue buckets with finance monthly.
Separate new-logo growth from existing-client expansion.
Pair growth with managed-services gross margin and capacity.
Related MSP Fuel resources
Your company plan sets the target, priority and timing for improving this number from your current position.
Further reading: Stripe: monthly and annual recurring revenue. External definitions provide context; MSP Fuel model-specific classifications are explained above.