MRR Calculator
Calculate Monthly Recurring Revenue (MRR) for SaaS businesses. Track New MRR, Expansion MRR, Churned MRR, and Net New MRR with ARR conversion and growth metrics.
MRR Components (This Month)
Total MRR
$15,000
Top-tier SaaS growth. Venture-scale trajectory.
Annualized growth rate: +1355%
MRR Waterfall
Gross New vs Lost MRR
MoM Growth Rate Benchmarks
- Your ARR is $180,000 (MRR x 12)
- Average customer pays $75/month
- You're adding $1,800 net new MRR monthly
- Expansion covers 53% of gross churn (healthy)
Related Calculators
About This Calculator
The MRR Calculator helps SaaS founders, finance teams, and investors accurately measure Monthly Recurring Revenue and its components. MRR is the lifeblood metric for subscription businesses, representing the predictable revenue you can expect each month. In 2026, with global SaaS spending exceeding $250 billion and median SaaS valuations tied directly to ARR multiples, understanding your MRR breakdown has never been more critical. This calculator computes Total MRR from customer tiers, breaks down New MRR, Expansion MRR, Churned MRR, and Net New MRR, converts to ARR (MRR x 12), calculates MRR per customer, and tracks month-over-month growth rates. Whether you're preparing for investor due diligence, board reporting, or strategic planning, mastering MRR calculation is essential for demonstrating business health and growth trajectory.
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How to Use the MRR Calculator
- 1Choose Simple Mode for quick calculations with total customers and average revenue, or Detailed Mode for tier-by-tier breakdown.
- 2In Simple Mode: Enter your total number of paying customers and average revenue per customer (ARPU).
- 3In Detailed Mode: Enter the number of customers and price for each plan tier (Starter, Professional, Enterprise, etc.).
- 4Apply any average discount percentage if you offer promotional pricing across your customer base.
- 5Enter previous month MRR to calculate month-over-month growth rate.
- 6Input MRR components: New MRR from new customers, Expansion MRR from upgrades, and Churned MRR from cancellations.
- 7Review your Total MRR, ARR (MRR x 12), MRR per customer, and Net New MRR.
- 8Compare your growth rate against 2026 SaaS benchmarks for your company stage.
- 9Use the MRR breakdown to identify whether growth is healthy or masking churn problems.
Formula
Total MRR = Sum of (Customers per Tier x Price per Tier) - DiscountsMRR represents the normalized monthly value of all recurring subscription revenue. Annual contracts should be divided by 12, quarterly by 3. One-time fees, usage-based overage charges, and professional services should be excluded. The power of MRR lies in its predictability: barring churn, you can expect this same revenue next month, enabling confident forecasting and planning.
MRR Formula and Calculation Methods
Basic MRR Calculation:
Total MRR = Number of Customers x Average Revenue Per Account (ARPA)
Tier-Based MRR Calculation:
Total MRR = (Tier1 Customers x Tier1 Price) + (Tier2 Customers x Tier2 Price) + ...
Example Calculation:
| Tier | Customers | Monthly Price | MRR Contribution |
|---|---|---|---|
| Starter | 500 | $29 | $14,500 |
| Professional | 200 | $99 | $19,800 |
| Enterprise | 50 | $299 | $14,950 |
| Total | 750 | $65.67 avg | $49,250 |
Normalizing Non-Monthly Contracts:
Annual Contract MRR = Annual Contract Value / 12
Quarterly Contract MRR = Quarterly Contract Value / 3
Example:
$12,000/year enterprise contract = $1,000 MRR
$1,500/quarter contract = $500 MRR
What to Include in MRR:
- Monthly subscription fees
- Normalized annual/quarterly contracts
- Committed minimum usage fees
- Recurring add-on charges
What to Exclude from MRR:
- One-time setup/implementation fees
- Variable usage overage charges
- Professional services revenue
- Hardware or physical product sales
- Free trial users (not yet paying)
The 5 Types of MRR: Complete Breakdown
Understanding MRR components is essential for diagnosing business health:
1. New MRR (New Business MRR) Revenue from brand new customers in their first month.
New MRR = Sum of first-month revenue from new customers
Benchmark: Should represent 60-80% of gross new revenue for growth-stage companies.
2. Expansion MRR (Upgrade MRR) Additional revenue from existing customers through upgrades, add-ons, or seat increases.
Expansion MRR = (Customer's new MRR) - (Customer's previous MRR)
Only counted when positive (customer paying more)
Benchmark: Best-in-class SaaS achieves expansion MRR equal to 20-40% of churned MRR.
3. Contraction MRR (Downgrade MRR) Revenue lost when existing customers downgrade to cheaper plans or reduce seats.
Contraction MRR = (Customer's previous MRR) - (Customer's new MRR)
Only counted when negative (customer paying less but still active)
Benchmark: Should be less than 2% of starting MRR monthly.
4. Churned MRR (Lost MRR) Revenue lost from customers who completely cancel their subscriptions.
Churned MRR = Sum of MRR from all cancelled customers
Benchmark: Target under 2% monthly for SMB, under 1% for enterprise.
5. Reactivation MRR Revenue from previously churned customers who return.
Reactivation MRR = Sum of MRR from returning former customers
Benchmark: Typically 5-15% of churned MRR for mature companies.
The MRR Waterfall Formula:
Ending MRR = Starting MRR + New MRR + Expansion MRR + Reactivation MRR - Contraction MRR - Churned MRR
Net New MRR = New MRR + Expansion MRR + Reactivation MRR - Contraction MRR - Churned MRR
Net New MRR: The True Growth Metric
Net New MRR reveals whether your business is actually growing, not just churning through customers:
Net New MRR Formula:
Net New MRR = New MRR + Expansion MRR - Contraction MRR - Churned MRR
Or simplified:
Net New MRR = Gross New MRR - Gross Lost MRR
Example MRR Waterfall:
| Component | Amount | % of Starting MRR |
|---|---|---|
| Starting MRR | $100,000 | 100% |
| + New MRR | +$15,000 | +15% |
| + Expansion MRR | +$8,000 | +8% |
| + Reactivation MRR | +$2,000 | +2% |
| - Contraction MRR | -$3,000 | -3% |
| - Churned MRR | -$7,000 | -7% |
| = Net New MRR | +$15,000 | +15% |
| = Ending MRR | $115,000 | 115% |
Why Net New MRR Matters:
- Positive Net New MRR: Business is growing organically
- Negative Net New MRR: Churn exceeds new sales - urgent problem
- Zero Net New MRR: Treading water - growth has stalled
Warning Signs in MRR Components:
| Red Flag | What It Indicates |
|---|---|
| New MRR > 50% of gross adds | Over-reliant on new sales |
| Churned MRR > New MRR | Death spiral - losing faster than gaining |
| Contraction > Expansion | Customers downgrading - value problem |
| Reactivation MRR spike | May indicate seasonal business or win-back campaign |
Healthy MRR Breakdown for Growth-Stage SaaS:
- New MRR: 10-20% of starting MRR
- Expansion MRR: 3-8% of starting MRR
- Contraction MRR: <2% of starting MRR
- Churned MRR: 2-5% of starting MRR
- Net New MRR: 5-15% of starting MRR
2026 SaaS MRR Benchmarks by Company Stage
Performance expectations vary significantly by ARR stage (SaaS Capital, ChartMogul):
MRR Growth Rate Benchmarks (2026):
| ARR Stage | Median MoM Growth | Top Quartile | Top Decile |
|---|---|---|---|
| $0-1M ARR | 12% | 20%+ | 30%+ |
| $1-5M ARR | 6% | 10%+ | 15%+ |
| $5-20M ARR | 4% | 7%+ | 10%+ |
| $20-50M ARR | 3% | 5%+ | 7%+ |
| $50M+ ARR | 2% | 3.5%+ | 5%+ |
MRR Churn Benchmarks (Monthly):
| Segment | Good | Great | Best-in-Class |
|---|---|---|---|
| Enterprise B2B | <1% | <0.5% | <0.25% |
| Mid-Market B2B | <2% | <1% | <0.5% |
| SMB B2B | <4% | <3% | <2% |
| B2C Subscription | <6% | <4% | <3% |
Net Revenue Retention (NRR) Benchmarks:
| Company Type | Good | Great | Elite |
|---|---|---|---|
| Enterprise SaaS | 100%+ | 115%+ | 130%+ |
| Mid-Market SaaS | 95%+ | 105%+ | 115%+ |
| SMB SaaS | 90%+ | 100%+ | 110%+ |
What Investors Look For in 2026:
| ARR Level | Expected MRR Quality Metrics |
|---|---|
| $1M ARR | 15%+ MoM growth, some churn acceptable |
| $5M ARR | 8%+ MoM growth, <5% monthly churn |
| $10M ARR | 5%+ MoM growth, NRR >100% |
| $20M+ ARR | Consistent growth, NRR >105%, path to profitability |
The "T2D3" Growth Framework: For venture-scale SaaS, the gold standard trajectory:
- Year 1: Triple ARR ($1M -> $3M)
- Year 2: Triple ARR ($3M -> $9M)
- Year 3: Double ARR ($9M -> $18M)
- Year 4: Double ARR ($18M -> $36M)
- Year 5: Double ARR ($36M -> $72M)
This requires ~25% MoM growth early, moderating to ~6% MoM by year 5.
ARR vs MRR: When to Use Which
ARR (Annual Recurring Revenue) Formula:
ARR = MRR x 12
When to Use MRR:
| Scenario | Why MRR |
|---|---|
| Monthly billing dominant | Matches actual cash flow |
| High churn business | Shows monthly trends faster |
| B2C/SMB SaaS | Month-to-month contracts common |
| Internal operations | Granular tracking needed |
| Early-stage startups | Monthly milestones matter |
When to Use ARR:
| Scenario | Why ARR |
|---|---|
| Enterprise sales | Annual contracts standard |
| Investor reporting | Industry standard metric |
| Valuation discussions | Multiples applied to ARR |
| Board presentations | Bigger numbers, annual context |
| Benchmarking | Most benchmarks use ARR |
Common ARR Calculation Mistakes:
| Mistake | Correct Approach |
|---|---|
| Including one-time revenue | Only recurring subscriptions |
| Not annualizing monthly contracts | Multiply monthly contracts by 12 |
| Double-counting multi-year deals | Use annual value only |
| Including professional services | Exclude non-recurring revenue |
| Counting free users | Only paying customers |
ARR Valuation Multiples (2026):
| Company Profile | ARR Multiple Range |
|---|---|
| High-growth (>50% YoY), profitable | 10-15x ARR |
| High-growth (>50% YoY), burning cash | 6-10x ARR |
| Moderate growth (20-50% YoY) | 4-8x ARR |
| Slow growth (<20% YoY), profitable | 3-5x ARR |
| Slow growth, unprofitable | 1-3x ARR |
The Rule of 40 Impact on Multiples: Companies achieving Rule of 40 (Growth Rate + Profit Margin >= 40%) command 2-3x higher multiples than those below 20%.
MRR Growth Rate Calculation
Month-over-Month MRR Growth Rate:
MoM Growth Rate = ((Current Month MRR - Previous Month MRR) / Previous Month MRR) x 100
Example:
Previous MRR: $100,000
Current MRR: $108,000
MoM Growth: (($108,000 - $100,000) / $100,000) x 100 = 8%
Annualized Growth Rate (CMGR): Compound Monthly Growth Rate converts MoM to annual perspective:
Annual Growth = ((1 + MoM Growth Rate)^12 - 1) x 100
Example:
8% MoM Growth -> ((1.08)^12 - 1) x 100 = 151% annualized
MoM to Annual Growth Conversion:
| Monthly Growth | Annual Growth |
|---|---|
| 2% | 27% |
| 4% | 60% |
| 6% | 101% |
| 8% | 152% |
| 10% | 214% |
| 15% | 435% |
| 20% | 792% |
Growth Rate by MRR Source: Track which components drive growth:
New Customer Contribution = New MRR / Net New MRR
Expansion Contribution = Expansion MRR / Net New MRR
Healthy Growth Profile:
| Growth Source | Early Stage | Growth Stage | Mature |
|---|---|---|---|
| New MRR | 80%+ | 60-70% | 40-50% |
| Expansion MRR | 15-20% | 25-35% | 40-50% |
| Reactivation | 0-5% | 5-10% | 10-15% |
Growth Efficiency Metric:
Burn Multiple = Net Burn / Net New ARR
- Excellent: <1x (Adding more ARR than burning)
- Good: 1-2x (Efficient growth)
- Concerning: 2-3x (Expensive growth)
- Critical: >3x (Unsustainable)
MRR Per Customer and Pricing Insights
Average Revenue Per Account (ARPA):
ARPA = Total MRR / Number of Customers
Example:
$150,000 MRR / 500 customers = $300 ARPA
ARPA Benchmarks by Segment (2026):
| Target Market | Typical ARPA | Top Performers |
|---|---|---|
| Consumer/Prosumer | $10-30/mo | Canva, Notion |
| SMB | $50-200/mo | Mailchimp, Gusto |
| Mid-Market | $500-2,000/mo | HubSpot, Zendesk |
| Enterprise | $5,000-50,000/mo | Salesforce, Workday |
ARPA Trend Analysis:
| ARPA Trend | Interpretation | Action |
|---|---|---|
| Increasing | Moving upmarket or pricing power | Maintain strategy |
| Stable | Consistent customer mix | Consider price increase |
| Decreasing | Downmarket drift or discounting | Investigate cause |
Pricing Model Impact on MRR:
| Model | MRR Characteristics | Predictability |
|---|---|---|
| Flat rate | Highly stable | Very high |
| Per-seat | Grows with customer | High |
| Usage-based | Variable month-to-month | Lower |
| Hybrid (base + usage) | Stable floor with upside | Medium-high |
Expansion Revenue Strategies:
| Strategy | Impact on ARPA | Implementation |
|---|---|---|
| Seat-based upsells | +20-50% | Track active users vs seats |
| Feature upgrades | +30-100% | Gate valuable features |
| Usage tiers | +10-30% | Metered billing |
| Cross-sell products | +50-200% | Product suite expansion |
ARPA vs LTV Relationship:
Simple LTV = ARPA / Monthly Churn Rate
Example:
$200 ARPA / 3% churn = $6,667 LTV
Common MRR Calculation Mistakes
Avoid these errors that inflate or deflate MRR:
Mistake 1: Including One-Time Revenue
| Wrong | Correct |
|---|---|
| Counting $5,000 setup fee as MRR | Exclude completely |
| Adding implementation services | Separate services revenue |
| Including hardware sales | Track product revenue separately |
Mistake 2: Not Normalizing Contracts
| Contract Type | Wrong MRR | Correct MRR |
|---|---|---|
| $24,000/year | $24,000 | $2,000/month |
| $6,000/quarter | $6,000 | $2,000/month |
| $1,200/month | $1,200 | $1,200/month |
Mistake 3: Counting Non-Committed Revenue
| Revenue Type | Include in MRR? |
|---|---|
| Free trial users | No - not paying |
| Pilot programs | Only if contracted |
| Usage overage | No - not predictable |
| Contracted minimum | Yes |
Mistake 4: Double-Counting
- Multi-year deals: Count annual value only, not total contract
- Renewed customers: Don't count as both retention AND new
- Upgraded customers: Count only the delta as expansion
Mistake 5: Timing Issues
| Scenario | Correct Treatment |
|---|---|
| Customer signed Dec 28, starts Jan 1 | Count in January |
| Customer cancels mid-month | Full month of churn |
| Upgrade effective mid-month | Prorate or next month |
Mistake 6: Currency and Pricing
- Use consistent currency (usually USD)
- Decide on list price vs actual price policy
- Document discount treatment clearly
Audit Checklist:
- Are all revenue streams truly recurring?
- Are annual/quarterly contracts normalized?
- Is there clear inclusion/exclusion criteria?
- Are start/end dates handled consistently?
- Is the methodology documented for investors?
MRR Forecasting and Planning
Simple MRR Forecast Model:
Next Month MRR = Current MRR x (1 - Churn Rate) + Expected New MRR + Expected Expansion MRR
Example:
$100K x (1 - 0.03) + $12K + $5K = $114K projected MRR
12-Month MRR Projection:
Month N MRR = Starting MRR x (1 - Churn)^N + Cumulative New/Expansion
Scenario Planning Framework:
| Scenario | Assumptions | Use Case |
|---|---|---|
| Conservative | 50% of pipeline, 1.5x churn | Board reporting |
| Base | Historical conversion, historical churn | Operating plan |
| Optimistic | 75% of pipeline, 0.5x churn | Upside planning |
Key Forecasting Inputs:
| Input | Source | Reliability |
|---|---|---|
| Churn rate | Historical 3-month average | High |
| New MRR | Pipeline x close rate | Medium |
| Expansion | Existing customer analysis | Medium-high |
| Contraction | Usage trend analysis | Medium |
Seasonality Considerations:
| Industry | Typical Pattern |
|---|---|
| B2B Enterprise | Q4 strong (budget cycles) |
| SMB | Q1 weak (new year budgets) |
| E-commerce | Q4 strong (holiday) |
| Education | Aug-Sep strong (school year) |
Forecasting Best Practices:
- Use cohort-based forecasting for accuracy
- Track forecast vs actual monthly
- Adjust assumptions quarterly
- Build scenarios, not single forecasts
- Include leading indicators (pipeline, trials)
MRR to Cash Flow Considerations:
| MRR Type | Cash Timing |
|---|---|
| Monthly billing | Same month |
| Annual prepaid | Cash upfront, recognize monthly |
| Net terms (30/60/90) | Delayed collection |
| Usage-based | Arrears billing common |
MRR and Related SaaS Metrics
How MRR Connects to Other Metrics:
MRR to LTV (Lifetime Value):
LTV = ARPA x Gross Margin / Monthly Churn Rate
Calculate LTV with our LTV Calculator.
MRR to CAC Payback:
CAC Payback (months) = CAC / (ARPA x Gross Margin)
Measure acquisition efficiency with our CAC Calculator.
MRR to Churn Rate:
Revenue Churn Rate = Churned MRR / Starting MRR
Track retention with our Churn Rate Calculator.
MRR to ARR:
ARR = MRR x 12
Use ARR for annual planning with our ARR Calculator.
MRR to Burn Rate:
Net Burn = Monthly Operating Expenses - MRR
Runway = Cash / Net Burn
Plan runway with our Burn Rate Calculator.
Key Metric Relationships:
| Metric | Healthy Ratio | Why It Matters |
|---|---|---|
| LTV:CAC | >3:1 | Unit economics viability |
| CAC Payback | <12 months | Capital efficiency |
| NRR | >100% | Expansion > churn |
| Gross Margin | >70% | SaaS scalability |
| Rule of 40 | >40% | Growth + profitability balance |
The SaaS Metrics Stack:
- Foundation: MRR (revenue reality)
- Growth: Net New MRR, MoM Growth Rate
- Retention: Churn, NRR, Expansion MRR
- Efficiency: CAC, LTV, CAC Payback, Burn Multiple
- Profitability: Gross Margin, Rule of 40
Pro Tips
- 💡Normalize all contracts to monthly values - a $24,000 annual contract is $2,000 MRR, not $24,000.
- 💡Track all five MRR components (New, Expansion, Contraction, Churn, Reactivation) separately to diagnose growth health.
- 💡Exclude one-time revenue, professional services, and usage overage from MRR calculations - only truly recurring revenue counts.
- 💡Calculate Net New MRR monthly to see if you're actually growing or just replacing churned customers.
- 💡Document your MRR calculation methodology clearly - investors will scrutinize it during due diligence.
- 💡Use cohort analysis to track MRR by customer acquisition month and identify retention trends.
- 💡Monitor ARPA trends - declining ARPA often signals pricing pressure or downmarket drift.
- 💡Target expansion MRR equal to at least 30% of churned MRR for healthy unit economics.
- 💡Build an MRR waterfall chart showing Starting MRR + adds - losses = Ending MRR for board presentations.
- 💡Compare your MRR growth rate to benchmarks for your ARR stage, not just against last month.
- 💡Track committed MRR (signed but not started) separately from live MRR for accurate forecasting.
- 💡Set alerts for negative Net New MRR months - they require immediate investigation.
- 💡Calculate MRR per employee to track operational efficiency as you scale.
- 💡Review MRR composition quarterly - healthy businesses have diversifying, not concentrating, customer bases.
- 💡Use MRR data to calculate CAC payback, LTV:CAC ratio, and other efficiency metrics.
Frequently Asked Questions
MRR (Monthly Recurring Revenue) is the predictable revenue a subscription business can expect each month from all active subscriptions. It's the most important SaaS metric because it measures business health, enables accurate forecasting, and directly determines company valuation. Unlike one-time sales, MRR compounds over time - a customer paying $100/month generates $1,200 in year one and continues paying in year two without additional acquisition cost.
