What is recurring monthly revenue (RMR)?
Recurring monthly revenue (RMR) is revenue billed every month under ongoing contracts, such as alarm monitoring, inspection or maintenance agreements. It is the security and life safety industry's name for the contracted, repeating part of the business, measured as a monthly run rate. Installation, project and one-time repair revenue sit outside it.
Why it matters to a revenue leader
Buyers of security and alarm businesses often price account portfolios as a multiple of RMR, so every dollar of RMR added or lost moves enterprise value. Trade press covering these deals stresses that the definition gets negotiated: sales tax, pass-through charges and accounts far in arrears are usually stripped out. Fire and life safety companies apply the same idea to inspection and service agreements. For a revenue leader at a PE-backed company, RMR growth after cancellations is often the number the sponsor watches most closely.
How to calculate it
RMR = sum of monthly recurring charges on active contracts at period end. Net new RMR = RMR added minus RMR cancelled. RMR × 12 approximates the annual recurring run rate.
Common mistake: counting sales tax, pass-through fees or seriously past-due accounts as RMR.
Example
Fictitious numbersA security and fire monitoring company starts the quarter at $410,000 of RMR. Sellers add $22,000 in new monitoring and inspection agreements, and cancellations remove $9,000. Ending RMR is $423,000, and net new RMR for the quarter is $13,000.
"How much RMR did we add last quarter after cancellations, and which sellers added it?"
Sources
- How to Calculate Company Value Based on RMR (Security Sales & Integration) checked 9 Oct 2026
- Why alarm accounts sell as a multiple of RMR (SP&T News) checked 9 Oct 2026