Monthly Recurring Revenue (MRR)

Annual Recurring Revenue (ARR) is the total value of recurring subscription revenue normalized to a one-year period. For mobile subscription apps, ARR is calculated by multiplying Monthly Recurring Revenue (MRR) by 12, or by summing the annualized value of all active subscriptions. ARR is one of the most important metrics for subscription businesses because it provides a predictable baseline of revenue, making it essential for financial planning, investor reporting, and company valuation. Unlike total revenue, ARR excludes one-time purchases, refunds, and non-recurring fees, providing a cleaner view of the sustainable revenue engine. Growth-stage subscription apps track ARR trajectory closely, as consistent month-over-month ARR growth signals product-market fit and effective monetization strategy.

Subscription revenue refers to the income generated from a recurring payment model, where users pay a regular fee, often on a monthly or yearly basis, to access premium features, content, or services within the app.

Net Revenue Retention (NRR), also called Net Dollar Retention (NDR), measures the percentage of recurring revenue retained from existing customers over a given period, including the effects of upgrades, downgrades, and churn. An NRR of 100% means the business retains all of its existing revenue; above 100% means expansion from existing users exceeds losses from churn and downgrades. For subscription apps, NRR is a powerful indicator of product-market fit and monetization health. An app with 110% NRR is growing its revenue base by 10% from existing users alone, before any new customer acquisition — a strong signal that users find increasing value over time. NRR above 100% is often driven by users upgrading to higher-priced plans, purchasing add-ons, or re-subscribing after a lapse. Conversely, NRR below 100% indicates that the business must continuously acquire new subscribers just to maintain its current revenue level, putting pressure on user acquisition efficiency. Top-performing subscription businesses typically achieve NRR of 110–130%, and investors consider this metric one of the strongest predictors of long-term sustainable growth.

The percentage of users who stop using your mobile app over a specific time period. Churn rate is the inverse of retention rate and serves as a critical health indicator for any app business. For subscription apps, tracking churn is essential since even small reductions in churn can significantly impact revenue and customer lifetime value (LTV). Churn rate, also known as attrition rate, measures the percentage of users who stop using your mobile app over a specific period. In the context of mobile applications, churn represents users who disengage from your app—whether they uninstall it completely, cancel their subscription, or simply stop opening and interacting with it.

The number of users who have signed up for a recurring payment plan to access premium or additional features within the app. These subscriptions typically involve monthly or yearly payments, and give users access to features that are not available to non-subscribers.