MRR and ARR Calculator

Enter the MRR you started the month with and the four ways it moved: new, expansion, contraction and churned. You get net new MRR, ending MRR and ARR, drawn as a waterfall.

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From customers who were not paying last month.

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Upgrades and added seats from existing customers.

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Downgrades from customers who stayed.

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From subscriptions that ended.

Ending MRR
$46,000
$40,000 at the start, +$6,000 net new
Net new MRR
+$6,000
$8,000 added, $2,000 lost
ARR
$552,000
Ending MRR times 12
MRR growth this month
15.0%
Net new divided by starting MRR
Quick ratio
4.0
MRR added per $1 lost
How MRR moved from the start of the month to the end
Starting MRR$40,000Starting MRR: $40,000New+$6,000New: +$6,000Expansion+$2,000Expansion: +$2,000Contraction-$800Contraction: -$800Churned-$1,200Churned: -$1,200Ending MRR$46,000Ending MRR: $46,000
  • Start and end
  • Added
  • Lost
The sums, with your numbers
  • $6,000 + $2,000 − $800 − $1,200= +$6,000 net new
  • $40,000 + $6,000= $46,000 ending MRR
  • $46,000 × 12= $552,000 ARR
  • +$6,000 ÷ $40,000 × 100= 15.0% growth
  • $8,000 ÷ $2,000= 4.0 quick ratio

Net new MRR is new plus expansion, minus contraction and churned MRR.

net new MRR = new MRR + expansion MRR − contraction MRR − churned MRR
ending MRR = starting MRR + net new MRR
ARR = ending MRR × 12

The calculator starts the month at $40,000. $6,000 of new MRR and $2,000 of expansion add $8,000. $800 of contraction and $1,200 of churned MRR take away $2,000. Net new MRR is $6,000, ending MRR is $46,000, and ARR is $46,000 times 12, which is $552,000.

Each of the four movements answers a different question.

  • New MRR. The monthly value of subscriptions from customers who were not paying last month.
  • Expansion MRR. Extra monthly revenue from customers who were already paying: upgrades, added seats, add-ons.
  • Contraction MRR. Monthly revenue lost from customers who stayed but pay less: downgrades and removed seats.
  • Churned MRR. The monthly value of subscriptions that ended.

The waterfall keeps them apart because the same net number can come from very different months. $6,000 of net new MRR from $8,000 added and $2,000 lost is not the same business as $6,000 from $20,000 added and $14,000 lost.

quick ratio = (new MRR + expansion MRR) ÷ (contraction MRR + churned MRR)
MRR growth rate = net new MRR ÷ starting MRR × 100

The quick ratio puts that difference in one number. In the example it is $8,000 divided by $2,000, which is 4.0. In the busier month it is 1.4. Growth for the month is $6,000 divided by $40,000, which is 15.0%.

MRR counts only recurring revenue, with every plan turned into a monthly amount.

A plan billed for longer than a month is divided by the months it covers. One-time charges such as setup fees are left out, because they do not come back next month. A free trial adds nothing until its first payment goes through.

How plans with different billing periods count toward MRR.
PlanCustomer paysCounts as MRR
Monthly$49 every month$49
Quarterly$150 every 3 months$50
Annual$1,200 once a year$100
Two-year$2,000 every 2 years$83.33

For a product with a free trial, new MRR is trials started, times the share that pay, times price. The trial conversion rate calculator works that step out. 1Capture works on the share that pay: it verifies a payment method when the trial starts.

People also ask these questions about MRR and ARR.

How do you calculate MRR?

Add up what every paying customer pays for one month of their subscription. Plans billed for longer are converted to a monthly amount first, so a $1,200 annual plan counts as $100. One-time charges are left out. To roll MRR forward a month, take starting MRR, add new and expansion MRR, and subtract contraction and churned MRR.

How do you calculate ARR from MRR?

Multiply MRR by 12. Ending MRR of $46,000 is an ARR of $552,000. ARR worked out this way is a run rate: what a year brings in if this month's MRR stays as it is.

What is the difference between MRR and ARR?

They are the same recurring revenue seen over two periods. MRR is one month of it and ARR is 12 months of it. Companies that sell monthly plans tend to steer by MRR, and companies that sell annual contracts tend to quote ARR.

What is net new MRR?

It is how much MRR changed in the month: new MRR plus expansion MRR, minus contraction MRR and churned MRR. In the example, $8,000 was added and $2,000 was lost, so net new MRR is $6,000.

How do annual plans count toward MRR?

Divide the plan price by the number of months it covers. A $1,200 annual plan adds $100 of MRR in each of its 12 months. It does not add $1,200 in the month the customer pays.

What is the SaaS quick ratio?

It is MRR added divided by MRR lost: new plus expansion, over contraction plus churned. In the example that is $8,000 divided by $2,000, which is 4.0. For every $1 of MRR that left, $4 came in.

Is MRR the same as revenue?

No. MRR is a snapshot of what active subscriptions are worth per month. Revenue is what was earned in a period under accounting rules, and cash is what was collected. A month with many annual signups can bring in far more cash than MRR.

These free calculators cover the rest of your subscription numbers.