Revenue

    MRR Calculator: Formula + Free Tool

    Calculate your Monthly Recurring Revenue, ARR, Quick Ratio, and 12-month projection. See what your MRR looks like under different growth scenarios.

    How to calculate MRR

    Monthly Recurring Revenue (MRR) is the total predictable revenue your SaaS earns from active subscriptions each month. Every subscription is normalized to a monthly amount so you get one comparable number regardless of billing interval.

    Simple form
    MRR = Number of paying customers × ARPU

    In practice, most SaaS companies have multiple plans, billing intervals, and coupons. The component form captures what drives MRR change each month:

    Component form
    Net New MRR = New MRR + Expansion MRR + Reactivation MRR − Churned MRR − Contraction MRR
    VariableWhat it captures
    New MRRRevenue from first-time subscriptions by new customers
    Expansion MRRRevenue increase from upgrades, add-ons, or seat additions by existing customers
    Reactivation MRRRevenue from customers who previously canceled and returned
    Churned MRRRevenue lost from customers who canceled all subscriptions
    Contraction MRRRevenue decrease from downgrades or partial cancellations

    Worked example: 200 customers across 3 plans

    A SaaS company has 200 paying customers on three plans:

    PlanCustomersPriceMonthly MRR
    Starter80$29/mo$2,320
    Pro100$79/mo$7,900
    Enterprise20$2,388/yr$3,980
    Total200$14,200
    MRR = (80 × $29) + (100 × $79) + (20 × $2,388 ÷ 12) = $14,200

    The enterprise plan is billed annually at $2,388/year, so each customer contributes $199/month to MRR. This normalization is what makes MRR useful — you can compare monthly and annual plans on the same scale. The resulting ARR is $14,200 × 12 = $170,400.

    What counts as MRR (and what doesn’t)

    Counts as MRR

    • Monthly subscriptions (at face value)
    • Annual plans (÷ 12)
    • Quarterly plans (÷ 3)
    • Recurring add-ons and seat charges
    • Amounts after active coupon/discount

    Does NOT count as MRR

    • One-time setup or implementation fees
    • Usage-based overages (not predictable)
    • Free trials with no payment method
    • 100% discount coupons ($0 effective price)
    • Refunds and credit notes
    Why discounts reduce MRR
    A $100/month plan with a 20% coupon is $80 of MRR, not $100. If your analytics tool excludes discounts, your MRR will look higher — and less accurate. When the coupon expires, the $20 increase shows up as expansion MRR in the next period.

    The most common MRR mistake

    Booking the full annual payment as one month’s MRR. A customer pays $1,200 upfront for an annual plan. Your bank account shows $1,200 — but your MRR from that customer is $100/month, not $1,200.

    This mistake inflates MRR by up to 12× in the month of payment, then shows zero for the next 11 months. It creates a sawtooth pattern that makes every downstream metric unreliable — churn rate, retention, and growth all inherit the distortion.

    Benchmark your MRR growth

    See how your MRR growth rate compares against SaaS companies at your stage.

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    Your model

    Customers150
    ARPU / mo$79
    Monthly churn5%
    New customers MoM8%
    Expansion MRR MoM3%

    Frequently asked questions

    How do you calculate MRR?

    MRR = the sum of every active subscription’s price, normalized to a monthly amount. A $120/year plan contributes $10/month. A $150/quarter contributes $50/month. Active discounts and coupons reduce the amount because discounted revenue is real revenue loss, not a bookkeeping artifact.

    What is the difference between MRR and ARR?

    ARR = MRR × 12. They measure the same recurring revenue at different scales. Use MRR for monthly operational decisions — tracking churn, expansion, and retention trends. Use ARR for annual planning, fundraising, and investor communication where annualized figures are the standard unit.

    Should MRR include discounts?

    Yes. MRR should reflect what you actually collect, not the list price. A $100 plan with a 20% coupon is $80 of MRR. Excluding discounts inflates your numbers and misrepresents your revenue run rate. When the coupon expires, the increase shows up automatically as expansion MRR.

    What is a good MRR growth rate?

    It depends on stage. Early-stage SaaS companies targeting venture scale typically aim for 15–20% month-over-month MRR growth. At $50K+ MRR, 10–15% is strong. Above $200K MRR, 5–8% month-over-month is competitive. Compare against peers at your revenue tier using the benchmark tool, not industry-wide averages.

    What is the Quick Ratio and why does the calculator show it?

    The SaaS Quick Ratiomeasures growth efficiency: (New MRR + Expansion MRR) ÷ (Churned MRR + Contraction MRR). A ratio above 4 means you add $4 for every $1 lost — a sign of efficient growth. Below 1 means you’re shrinking. The calculator includes it because raw MRR tells you the size of the engine; Quick Ratio tells you whether it’s healthy.

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