— Business & Valuation
MRR Calculator
Build a monthly recurring revenue bridge from beginning MRR, new business, expansion, reactivation, contraction, and churn. See ending MRR, net new MRR, ARR, growth rate, quick ratio, and normalized monthly value of annual plans.
Monthly recurring revenue
$115,000
- Net new MRR
- $15,000
- ARR (= MRR × 12)
- $1,380,000
- MRR growth (MoM)
- 15%
- Quick ratio
- 4.33
Try: Movement bridge, Normalise billing cycles, Customers × ARPA, A losing month
— The MRR movement bridge
| Movement | Amount | Running MRR |
|---|---|---|
| Beginning MRR | $100,000 | $100,000 |
| New | $12,000 | $112,000 |
| Expansion | $6,000 | $118,000 |
| Reactivation | $1,500 | $119,500 |
| Contraction | $-1,500 | $118,000 |
| Churned | $-3,000 | $115,000 |
| Ending MRR | $115,000 | $115,000 |
— MRR by month
| Month | MRR | MoM growth |
|---|---|---|
| Month 1 | $85,000 | |
| Month 2 | $95,000 | 11.76% |
| Month 3 | $105,000 | 10.53% |
| Month 4 | $115,000 | 9.52% |
— How MRR moved this month
Download— How it works
MRR = customers × ARPA (monthly), or the sum of all normalised monthly recurring revenue (annual ÷ 12, quarterly ÷ 3). MRR movement: New + Expansion + Reactivation − Contraction − Churned = Net New MRR. ARR = MRR × 12. Quick Ratio = (New + Expansion + Reactivation) ÷ (Contraction + Churned).
MRR and the movement bridge
Monthly recurring revenue is the recurring run-rate for a single month — the predictable subscription revenue you’d collect if nothing changed. You can get it three ways: customers × average revenue per account (ARPA), the sum of every active subscription’s monthly value, or by walking last month’s MRR forward through its movements. That walk is where the insight lives. Beginning MRR, plus new business, expansion (upgrades) and reactivation (returning customers), minus contraction (downgrades) and churn (cancellations), gives ending MRR. The net of those five movements is net new MRR — the single cleanest measure of the month’s commercial output, and the monthly twin of net new ARR.
Worked example — the MRR movement bridge: Beginning 100,000 + New 12,000 + Expansion 6,000 + Reactivation 1,500 − Contraction 1,500 − Churned 3,000 = Ending 115,000. Net new MRR = 15,000 (a 15% month). ARR = 115,000 × 12 = 1,380,000.
The annual-plan trap: normalising billing cycles
The most common MRR mistake is a billing-cycle error: counting an annual plan as a full month of MRR in the month it’s billed. A customer paying 12,000 once a year is worth 1,000 of MRR, not 12,000 — you divide the annual value by twelve. The same applies to quarterly plans (divide by three) and any other cycle. Skipping this normalisation inflates MRR wildly in months with annual renewals and makes the metric meaningless. The calculator’s “normalise billing” mode does it for you: enter monthly-billed MRR, the total annual contract value of annual plans, and the total of quarterly plans, and it converts everything to a true monthly figure. ARR is then simply MRR × 12 — but only because the MRR underneath has been normalised correctly first.
Growth, the quick ratio and the ARR link
Two efficiency reads come straight off the movements. MRR growth rate (month-over-month) is net new MRR over the beginning balance — the pace of the month. The quick ratio divides the gains (new + expansion + reactivation) by the losses (contraction + churn): it asks how many dollars of growth you generate for each dollar that leaks away, and a ratio of 4 or more is considered healthy for an early-stage SaaS business. Because MRR is the granular operating layer, it’s where churn and expansion show up first — long before they move the annual number. ARR (MRR × 12) is the headline investors quote, but MRR and its bridge are what an operating team actually steers by month to month. Educational tool only, not investment advice.
— Reader questions
How do you calculate MRR?
Multiply paying customers by the average revenue per account per month (ARPA), or sum the monthly value of every active subscription. Crucially, normalise non-monthly plans first: an annual plan’s monthly MRR is its annual value ÷ 12, and a quarterly plan’s is its value ÷ 3. MRR counts only recurring subscription revenue, never one-off fees.
What is the MRR movement bridge?
It’s the walk from last month’s MRR to this month’s, broken into its movements: beginning MRR, plus new, expansion and reactivation, minus contraction and churn, giving ending MRR. The net of the movements is net new MRR. It’s the monthly equivalent of the ARR bridge and the central artifact of a SaaS operating review — the waterfall chart here draws it.
How do you turn MRR into ARR?
ARR = MRR × 12, provided the MRR has been normalised correctly (annual plans counted at 1/12, quarterly at 1/3, and so on). The relationship is exact only when MRR reflects true monthly recurring revenue; if MRR is inflated by counting annual plans as full months, multiplying by 12 compounds the error.
Why must you normalise annual plans in MRR?
Because MRR is a monthly figure. An annual plan delivers its revenue over twelve months, so its monthly contribution is the annual value divided by twelve — not the full amount in the month it’s billed. Counting the whole annual payment as one month’s MRR is the single most common MRR mistake and badly distorts the metric, especially around renewal months.
What is net new MRR?
Net new MRR is the change in MRR over the month: new + expansion + reactivation − contraction − churned, which also equals ending MRR minus beginning MRR. It captures the full picture of a month — what you won, what existing customers added, and what you lost — in one number.
What is a good MRR quick ratio?
The quick ratio is (new + expansion + reactivation) ÷ (contraction + churn). It measures growth efficiency — how many dollars of new and expanded MRR you add for each dollar lost to downgrades and cancellations. A ratio of 4 or above is generally considered healthy for a growing SaaS business; below 1 means you’re shrinking.