What this SaaS MRR Calculator actually measures

Monthly Recurring Revenue (MRR) is the “heartbeat” metric for subscription businesses. It answers a simple question: How much subscription revenue will you reliably collect each month? The trick is that MRR changes every month, and it changes for different reasons: new customers arrive, existing customers upgrade (expansion), some downgrade (contraction), and some cancel entirely (churn). This calculator helps you break those forces apart so you can see what’s really driving growth — and what’s quietly leaking it.

In the calculator above you enter a starting MRR and then estimate what will happen over the next month: how many new customers you’ll add, your average monthly price, your logo churn rate (customers canceling), and your expansion and contraction rates (how the remaining customers change their spend). The outputs include new MRR, expansion MRR, churned MRR, contraction MRR, net new MRR, and your ending MRR. It also calculates ARR, MRR growth rate, Net Revenue Retention (NRR), and a simple SaaS Quick Ratio to sanity‑check the quality of growth.

Starting MRR is your baseline monthly recurring revenue at the beginning of the month. If your business is young, this might be the sum of a handful of subscriptions. If your business is established, it might be thousands of invoices. Either way, starting MRR is the “stock” and the remaining terms are “flows” that move the stock up or down.

New MRR is the recurring revenue added from customers who were not paying you last month. A simple estimate is:

New MRR = New Customers × Average Monthly Price

Example: If you add 25 new customers and your average monthly subscription is $80, then new MRR is 25 × 80 = $2,000.

Churned MRR is the MRR you lose when customers cancel. This calculator uses a percentage of starting MRR:

Churned MRR = Starting MRR × Churn Rate

Example: Starting MRR is $40,000 and your churn rate is 4%. Churned MRR is $40,000 × 0.04 = $1,600.

Expansion MRR is additional recurring revenue from existing customers upgrading (seats, usage tiers, add‑ons, higher plans). The formula is:

Expansion MRR = Starting MRR × Expansion Rate

Example: Starting MRR is $40,000 and expansion rate is 3%. Expansion MRR is $40,000 × 0.03 = $1,200.

Contraction MRR is the MRR you lose from existing customers downgrading or reducing usage without canceling. Formula:

Contraction MRR = Starting MRR × Contraction Rate

Example: Starting MRR is $40,000 and contraction is 1.5%. Contraction MRR is $40,000 × 0.015 = $600.

Now we combine the flows:

Net New MRR = New MRR + Expansion MRR − Churned MRR − Contraction MRR
Ending MRR = Starting MRR + Net New MRR

Continuing our examples: New MRR = $2,000, expansion MRR = $1,200, churned MRR = $1,600, contraction MRR = $600. Net New MRR = 2,000 + 1,200 − 1,600 − 600 = $1,000. Ending MRR = $40,000 + $1,000 = $41,000.

Growth rate puts net new MRR into context:

MRR Growth % = (Net New MRR ÷ Starting MRR) × 100

If starting MRR is $40,000 and net new is $1,000, then growth is (1,000 ÷ 40,000) × 100 = 2.5% for the month. Monthly growth is powerful because small differences compound. At 2.5% monthly, you roughly double in a bit over two years; at 5% monthly, you double in about 14–15 months.

ARR is simply the annualized version of MRR:

ARR = Ending MRR × 12

If ending MRR is $41,000, ARR is $492,000. ARR is useful for investor conversations and planning budgets, but MRR is better for operating month‑to‑month.

NRR tells you how your existing customer base behaves if you stop acquiring new customers for a month. It’s the “stickiness + expansion” metric:

NRR = (Starting MRR − Churned MRR − Contraction MRR + Expansion MRR) ÷ Starting MRR × 100

In our example: NRR = (40,000 − 1,600 − 600 + 1,200) ÷ 40,000 × 100 = 97.5%. An NRR above 100% means your existing customers expand enough to more than offset churn and downgrades — a very strong signal in SaaS. Early‑stage B2B products often start below 100% and improve with better onboarding, product value, and packaging.

The Quick Ratio is a simple “growth quality” check:

Quick Ratio = (New MRR + Expansion MRR) ÷ (Churned MRR + Contraction MRR)

A ratio above 4 is often considered excellent, 2–4 is healthy, and below 2 means you’re spending a lot of effort to replace revenue you’re losing. It’s not a law of physics — it’s a flashlight. If your quick ratio is low, focus on retention and expansion before pouring fuel into acquisition.

A simple monthly operating ritual

Use this calculator the same way each month. Start with your starting MRR (from Stripe, Chargebee, Paddle, your billing system, or a spreadsheet). Then estimate next month’s acquisition (new customers), pricing (average subscription), and retention dynamics (churn, expansion, contraction). The output becomes a one‑page “MRR plan” you can compare to what actually happens.

If your actual ending MRR misses the plan, don’t panic — diagnose. Was new customer volume lower than expected? Was churn higher? Did expansion drop because you didn’t ship the upgrade feature? MRR planning is powerful because it forces you to name the levers you can pull.

Increase the right thing, not just “more customers”

• Reduce churn first: churn is a tax on every growth channel. Even a 1% improvement compounds fast.
• Build expansion paths: add seats, usage, add‑ons, or premium features that naturally map to customer success.
• Fix downgrade causes: contraction often signals pricing mismatch, unclear packaging, or missing value at higher tiers.
• Raise ARPA carefully: modest pricing increases can lift new MRR and expansion, but watch churn sensitivity.
• Segment your metrics: churn and expansion differ by cohort, plan, industry, and acquisition channel.

Frequently Asked Questions

• What’s the difference between “logo churn” and “revenue churn”?

  Logo churn is the percentage of customers who cancel. Revenue churn is the percentage of MRR lost. If larger customers churn, revenue churn can be higher than logo churn. This calculator uses churn as a percentage of starting MRR, which is closer to revenue churn.

• Should expansion be calculated on starting MRR or ending MRR?

  Most teams model expansion on starting MRR because it keeps the math clean and avoids circular definitions. In reality, expansion and contraction happen throughout the month. For planning, starting MRR is a good approximation.

• My starting MRR is $0. Does growth % still work?

  When you’re at $0, percentage growth isn’t meaningful. This calculator will still show your new MRR and ending MRR, but growth % will display as “—”. Focus on absolute MRR until you have a stable baseline.

• What’s a “good” churn rate?

  It depends on your market and contract length. Enterprise annual contracts can have very low monthly churn. Self‑serve SMB products often have higher churn. Use your own history and segment by plan; the goal is to improve month over month, not match a random benchmark.

• Does this include one‑time revenue or services?

  No. This calculator is for recurring subscription revenue. If you sell setup fees or services, track those separately so you don’t confuse “revenue” with “recurring revenue.”

• Why model contraction separately from churn?

  Because downgrades are often a product or pricing signal you can fix. If churn is “they left,” contraction is “they stayed but got less value.” Different problem, different solution.

• How should I estimate ARPA if I have multiple plans?

  Use a weighted average: (Plan A price × share of new customers on A) + (Plan B price × share on B) + … If you’re not sure yet, choose a realistic blended number and refine as you collect data.

• Can I use this for weekly MRR?

  You can, but the rates must be weekly rates, and subscription businesses usually move too slowly for weekly churn to be stable. Monthly is the most common operating cadence.

This calculator is for planning and education. Real billing systems have details (proration, discounts, annual plans, refunds). Use your actual data for reporting, and use this tool for clear, consistent forecasting.

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