On the first morning of the month, before the lights are on, a membership studio has already made most of its revenue. The members are there, the cards are on file, and the dues will bill whether or not it rains. That number has a name, monthly recurring revenue, and it is the most useful figure most owners never write down.
Owners watch revenue instead, and revenue is a blend. It mixes the dues that will repeat with the packs, privates and water bottles that have to be sold again from zero next month. Separating the two changes how you read every month. This piece does it on one invented studio, Alturra Studios, with 240 members who each pay $169 a month. Real studios have several plans; one price keeps the arithmetic easy to follow, and the method is the same with five.
MRR in one minute
- MRR is a rate, not a total. It is what the members you have today will pay in a month. Revenue is what the month actually took.
- Watch the movements, not the level. New members add to it; cancellations and pauses take from it. The difference is net new MRR, and that is the growth number.
- The recurring share is how much of the month is already made. The rest has to be sold again, every month, from nothing.
| The number | The sum | March, in the example | What it tells you |
|---|---|---|---|
| MRR | active members × dues, plan by plan | 240 × $169 = $40,560 | where the month starts |
| New MRR | new members × their dues | 18 × $169 = +$3,042 | what selling added |
| Canceled MRR | cancellations × their dues | 12 × $169 = −$2,028 | what has to be replaced to stand still |
| Paused MRR | pauses × their dues | 4 × $169 = −$676 | dues on hold, not yet lost |
| Net new MRR | new − canceled − paused ± plan changes | +$338 | whether the base grew |
| Recurring share | membership dues ÷ total revenue | $40,560 ÷ $52,000 = 78.0% | how much of the month repeats |
What is monthly recurring revenue for a fitness studio?
It is the total dues your active members are set to pay each month. One word in that sentence does the work: set. MRR counts money that will arrive because of a commitment already made. A member on autopay has made one. A class pack holder has not, however loyal she is, which is the heart of the difference between a pack and a membership.
The term comes from subscription businesses, and a studio with memberships is one. The idea it carries is simple. Some revenue you have to earn again each month. Some you only have to keep. A studio that knows which is which will spend its effort differently, because keeping a dollar of dues is nearly always cheaper than selling a new one.
How do you calculate MRR?
Members times dues, plan by plan, counted on one day. Alturra has one price, so it is one multiplication. A studio with three plans writes three rows and adds them. The arithmetic is trivial. The decisions about who goes in the count are where studios disagree with themselves.
- In: every membership on autopay, at the price the member actually pays. A founding member on an old rate goes in at the old rate.
- Out: packs, drop-ins, intro offers, privates, retail, workshops. They may recur in practice. Nothing makes them.
- Out while paused: frozen memberships. A paused member pays nothing this month. Keep her in her own group, as the freeze piece argues, so she is neither counted as paying nor written off as gone.
- In, but flagged: a member whose payment failed. She has not canceled. Her dues are still owed and usually recovered, so she stays in MRR until the membership actually ends. The failed-payments playbook covers the recovery.
- Your call: annual and paid-in-full memberships. Most owners count one-twelfth of the price as that member's monthly figure. Whichever you choose, write it down beside your other definitions and apply it every month. How the cash itself is recorded in the books is a question for your accountant, and nothing here is accounting advice.
Count on the same day each month. The first is the natural choice: it is the number the month begins with, and it lines up with how retention is counted.
What is the difference between MRR, revenue and cash?
MRR is a rate, revenue is a month's total, and cash is what reached the bank. All three describe the same March at Alturra, and they are three different numbers. Confusing them is how an owner ends a strong month wondering where the money is.
Revenue is larger than MRR because it includes everything that does not repeat: $11,440 of packs, privates, intro offers, partner income and retail. Cash is smaller than revenue because the card processor keeps its fee and pays out a few days behind. The monthly close is where revenue and cash get tied together. MRR sits upstream of both, and it is the only one of the three you know on the first day.
How does MRR move during a month?
Four things move it: new members, cancellations, pauses and plan changes. Write them as a bridge from the opening figure to the closing one. If the bridge does not add up, a member has been counted twice or not at all, and it is worth finding out which.
The bridge is the retention formula in dollars. That piece counts the same March as people: 240 at the start, 18 joined, 12 canceled, 4 paused. Here each person carries her dues. When every member pays the same, the two views say the same thing. When plans differ, the dollar view is the truer one, because losing two members on the top plan costs more than losing two on the bottom one.
What is net new MRR, and why is it the growth number?
It is the change in MRR over the month, and it is what sign-ups look like after the exits are counted. Alturra's March felt like a good month at the desk. Eighteen people joined. The dues base grew by two.
One month proves little. Six months show the shape. Lay them side by side and the story of the studio's winter is on one screen.
Two things stand out that a revenue chart would hide. Growth is lumpy: one month delivered more than the other five together, which is the case for getting January's follow-up ready in the autumn. And the exits barely move. Between 11 and 16 members leave or pause every month, whatever the season. That steady drain is the real subject of the next section.
What does it cost to stand still?
Your monthly churn times your MRR, every month, before you grow by a dollar. Alturra lost 12 members in March, 5.0% of the 240 it started with. Twelve members at $169 is $2,028 of dues that has to be replaced just to open April where March began.
This is why the same studio can feel busy and stay flat. It is also why retention work shows up in MRR faster than acquisition does. Cut cancellations from 12 a month to 9 and net new MRR goes from $338 to $845 without one additional sign-up. The churn calculator will run that on your own numbers, and the piece on why members leave covers how a cancellation shows in booking data weeks before it happens.
How much of your revenue should be recurring?
Enough that a slow month does not frighten you, and the honest guide is your own trend. There is no figure that suits every studio. A studio built on memberships will carry a high share. One built on packs, drop-ins and privates will carry a low one and may be perfectly healthy. What you can read is direction.
If the recurring share drifts down while total revenue holds, the studio is replacing dues with one-off sales. Revenue looks fine and every month gets harder to make. If the share climbs because one-off sales are falling, that is a different warning. Read it next to the dollar figures, never alone. And when you think about price, remember that MRR moves with it immediately: the pricing piece shows how the plan ladder decides what each member's line is worth.
What to do this week:
- On the first of the month, count active memberships on autopay and multiply by what each pays. Write the total down with the date.
- For last month, list the four movements in dollars: new, canceled, paused, plan changes. Check that they bridge last month's opening figure to this month's.
- Divide last month's membership dues by its total revenue. Do the same for the five months before.
- Multiply last month's cancellations by your average dues. That is the price of standing still.
Where this lives
MRR is easy to calculate once and tedious to keep, because the count changes every day and the movements have to be sorted by hand. That upkeep is what Xyzios does. It works with Mindbody and is an approved Mariana Tek integration, and the platform stays your system of record.
It shows the dues expected over the next 30 days from your active memberships, recurring revenue as a share of sales, and the dues per paying member, with paused members counted as their own group. Then it works on the two leaks in the base. When a membership payment fails, it drafts a kind fix-up note. For members whose attendance is slipping against their own pattern, it drafts a short save note for those at high risk. Every note waits for your approval, and nothing reaches a member until you tap approve. How payment recovery works and how the save works cover both. The next step from here is a three-month forecast, which starts from exactly this number.
Start with one date and one multiplication. The leak calculator turns your own cancellations and failed payments into a year, and the two-minute studio check shows which number your studio is missing.