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What is Gross Monthly Recurring Revenue?

Ruben Buijs

Founder & Digital Consultant

Written on Aug 10, 2023

2 minutes

Product Management

Gross Monthly Recurring Revenue (GMRR) is a key metric used in the Saas industry to measure the total revenue generated from subscription-based products or services on a monthly basis. It represents the sum of all recurring revenue earned from active customers before any deductions or expenses are taken into account.


To understand GMRR better, let's consider a few examples:

  1. Company A offers a Saas product with a monthly subscription fee of $100. In a given month, they have 100 active customers. The Gross Monthly Recurring Revenue for Company A would be $10,000 ($100 * 100).

  2. Company B has different subscription tiers for their Saas product. They have 50 customers on the basic plan, each paying $50 per month, and 25 customers on the premium plan, each paying $100 per month. The Gross Monthly Recurring Revenue for Company B would be $7,500 (($50 50) + ($100 25)).


GMRR is a crucial metric for Saas product management for several reasons:

  1. Predictability: GMRR provides a predictable revenue stream since it represents recurring revenue from active customers. It helps businesses forecast future revenue and plan accordingly.

  2. Growth Measurement: Tracking GMRR allows businesses to measure their growth accurately over time. By analyzing changes in GMRR month over month, businesses can identify trends and make data-driven decisions to increase revenue.

  3. Valuation: Investors and potential acquirers often use GMRR as a valuation metric for Saas companies. A higher GMRR signifies a healthier and more valuable business.

How to Use Gross Monthly Recurring Revenue

To effectively use GMRR in Saas product management, follow these steps:

  1. Define the Calculation: Establish a clear and consistent method for calculating GMRR within your organization. This may involve determining which revenue streams to include, such as subscription fees, add-ons, or upgrades.

  2. Track Monthly Revenue: Continuously monitor and record the revenue generated from active customers on a monthly basis. This data can be obtained from your billing system or financial software.

  3. Analyze Trends: Regularly review your GMRR data to identify patterns and trends. Look for changes in GMRR growth rates, customer churn, or the impact of pricing changes. This analysis can provide insights into customer behavior and help inform strategic decisions.

  4. Set Growth Goals: Use GMRR as a benchmark to set achievable growth goals for your Saas product. By setting targets based on increasing GMRR, you can align your team's efforts towards revenue growth and customer retention.

Useful Tips

Consider these tips to optimize your use of GMRR:

  • Exclude One-Time Fees: When calculating GMRR, exclude one-time fees or charges that are not recurring. This ensures that the metric reflects only the recurring revenue generated from active customers.

  • Segment GMRR: Segmenting GMRR by customer cohorts or subscription tiers can provide deeper insights into the revenue generated from different customer segments. This can help identify areas of opportunity or potential challenges.

  • Monitor Churn: Keep a close eye on customer churn rates alongside GMRR. Churn can significantly impact GMRR, so understanding why customers are leaving and taking measures to reduce churn is crucial for sustained growth.

  • Consider Expansion Revenue: Include expansion revenue from existing customers who upgrade their subscription or purchase additional features. This can contribute to increasing GMRR and overall business growth.


Gross Monthly Recurring Revenue (GMRR) is a metric used to measure the total monthly recurring revenue generated by a SaaS product, without accounting for any discounts, refunds, or cancellations.
To calculate GMRR, you add up the monthly subscription fees of all active customers without considering any one-time payments, discounts, or other factors that may affect revenue.
GMRR provides a clear picture of the overall monthly revenue generated by a SaaS product, allowing product managers to track the growth or decline in recurring revenue over time.
GMRR does not account for any deductions, while NMRR considers factors such as discounts, refunds, and cancellations. NMRR provides a more accurate view of the revenue that a SaaS product can expect to receive on a monthly basis.
By monitoring GMRR over time, product managers can assess the success of customer acquisition, retention, and expansion efforts. Increasing GMRR indicates a healthy growth rate, while a decline may indicate potential issues that need to be addressed.
No, GMRR and MRR are not the same. GMRR represents the total revenue generated by all customers, while MRR refers to the average monthly revenue per customer.
No, GMRR cannot be negative as it represents the total revenue generated by active customers. However, individual customer MRR can be negative if they have received refunds or credits.
GMRR should ideally be calculated and monitored on a monthly basis to track revenue trends and make informed decisions related to pricing, customer acquisition, and retention strategies.
No, GMRR represents the monthly revenue, while ARR refers to the annualized version of MRR or GMRR. ARR is often used to forecast future revenue and evaluate the long-term health of a SaaS business.
Yes, GMRR can be used as a leading indicator to predict future revenue growth. By analyzing the trends in GMRR, product managers can make data-driven decisions to optimize pricing, improve customer retention, and drive expansion opportunities.

Article by

Ruben Buijs

Ruben is the founder of ProductLift. I employ a decade of consulting experience from Ernst & Young to maximize clients' ROI on new Tech developments. I now help companies build better products

Table of contents

  1. Examples
  2. Importance
  3. How to Use Gross Monthly Recurring Revenue
  4. Useful Tips
  5. Related Terms

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