Monthly recurring revenue

Monthly recurring revenue (MRR) is the predictable income from active memberships in a given month. It excludes one-offs — drop-ins, retail, PT packages — because the point of MRR is what you can count on, not what you happened to earn.

MRR = number of active members × average monthly membership fee

Normalise annual memberships by dividing by 12. Exclude paused members: they aren’t paying, and counting them inflates the only number you’re using to plan.

MRR changes in exactly four ways, and knowing which one is moving tells you what to fix:

• New — members joining
• Expansion — existing members upgrading
• Contraction — members downgrading
• Churn — members leaving

Flat MRR can hide heavy new sales cancelling out heavy churn. That gym feels busy and isn’t growing.

MRR is what you plan against — rent, staff, equipment. It’s also the number a lender or buyer asks for first, and a gym that can produce it with the four movements broken out looks materially more professional than one quoting last month’s takings.

MRR, active subscriptions and collection rate update in real time as payments move, rather than being assembled from a bank statement.