How to calculate MRR and ARR
- Enter monthly recurring revenue at the start of the month.
- Enter the movements during the month: new MRR from new customers, expansion from upgrades, contraction from downgrades and churned MRR from cancellations.
- See the ending MRR, ARR, growth rate, revenue retention and SaaS quick ratio, plus a projection that keeps adding the same new MRR while losing the same share of revenue.
The SaaS revenue metrics
MRR is the predictable revenue from subscriptions in a month, normalised to monthly amounts (an annual plan of 1,200 counts as 100 a month). One-off fees and usage spikes are excluded. ARR is MRR × 12, the annual run rate. Ending MRR = starting MRR + new + expansion − contraction − churn. Tracking each movement separately shows why revenue changed, not just that it did.
Net revenue retention shows what existing customers are worth over time: above 100% means upgrades outweigh losses, so revenue grows even without new sales. The quick ratio compares revenue gained with revenue lost; above 4 is considered efficient growth, while below 1 means the business is shrinking. The projection is simple compounding of this month's pattern, useful for spotting how churn caps growth: with a fixed amount of new MRR, revenue levels off where monthly losses equal new sales. Calculated in your browser; the link stores your figures.
What is the difference between MRR and ARR?
ARR is MRR multiplied by 12. Companies with mostly annual contracts usually report ARR; monthly-billing businesses use MRR.
Should annual plans count fully in the month they are paid?
No. For MRR, divide annual contract value by 12, whatever the billing schedule.
What is a good MRR growth rate?
Early-stage SaaS companies often target 10–20% a month; growth naturally slows as revenue gets larger.