How to Use the SaaS MRR
MRR is the single most important health metric in SaaS, but it's really made up of several moving parts: new business, expansion from upsells, and losses from churn and downgrades. This calculator breaks down your full MRR movement for the month and projects your annualized run rate (ARR).
Step-by-Step Guide
- 1
Enter your existing subscriber count and average monthly price per subscriber.
- 2
Enter new subscribers gained this month.
- 3
Enter churned subscribers lost this month.
- 4
Add expansion MRR from upgrades and contraction MRR from downgrades.
- 5
Review your net new MRR, ending MRR, growth rate, and projected ARR.
SaaS MRR Formula
Net New MRR = New MRR + Expansion MRR − Churned MRR − Contraction MRR Ending MRR = Current MRR + Net New MRR MRR Growth Rate = (Net New MRR ÷ Current MRR) × 100 ARR = Ending MRR × 12
Worked Example
Existing: 500 subs × $49 = $24,500 MRR. New: 60 subs × $49 = $2,940. Churned: 25 subs × $49 = $1,225. Expansion: $800. Contraction: $200. Net New MRR = $2,940 + $800 − $1,225 − $200 = $2,315 Ending MRR = $24,500 + $2,315 = $26,815 MRR Growth Rate = $2,315 ÷ $24,500 = 9.4% Projected ARR = $26,815 × 12 = $321,780
Understanding your result
Calculator results depend entirely on the information entered. For the most useful estimate, use current and accurate figures and include all costs that apply to your specific situation.
Frequently Asked Questions
What's the difference between MRR and ARR?
MRR (Monthly Recurring Revenue) is your predictable revenue per month; ARR (Annual Recurring Revenue) is simply MRR × 12, used for annual planning and often preferred when discussing larger, longer-term SaaS businesses.
What is a good MRR growth rate?
Early-stage SaaS companies often target 10–20% month-over-month growth; more mature companies typically see 5–10% monthly or 40–100%+ annually. Benchmark against your stage and market rather than a single universal number.
What's the difference between churned MRR and contraction MRR?
Churned MRR comes from customers who cancel entirely. Contraction MRR comes from existing customers who downgrade to a cheaper plan but don't fully cancel. Both reduce net new MRR but represent different customer behaviors worth tracking separately.
What is expansion MRR?
Expansion MRR is additional recurring revenue from existing customers — upgrades, add-ons, or seat increases. Strong expansion MRR (sometimes called negative churn when it exceeds churn) is one of the best indicators of a healthy SaaS business.
How do I reduce churn's impact on MRR?
Focus on onboarding quality, proactive customer success outreach for at-risk accounts, usage-based alerts, and building expansion revenue paths so upgrades can offset unavoidable churn.