Monthly Recurring Revenue is an important metric for every subscription business to track. It is considered to be a measure of predictable and recurring revenue for a subscription business. We calculate MRR as total recurring revenue in a month minus the refunds.
If the user's plan is annual, then for the purposes of calculation, it will be normalized to a monthly amount and then the MRR will be calculated accordingly.
Monthly Recurring Revenue = Sum of recurring revenue from monthly plans in the given month + Sum of recurring revenue from yearly subscriptions normalized to a month - (refunds in the month + any refunds to yearly plans normalized to a month).
While calculating the recurring revenue, we also make sure to exclude any discounts/coupons offered to a customer and if the discount is offered to an yearly plan, we normalize it accordingly. Another thing to note is one time payments , refunds that are not part of a plan will not be counted towards your monthly recurring revenue.