MRR Calculator

Calculate your monthly recurring revenue projections with our free SaaS calculator

Calculate Your MRR
Start with the basics - we'll calculate the rest
How much each customer pays you per month
Your current number of paying customers

Customer Dynamics

Expenses

RESULTS
Current MRR
$2,999

Monthly Recurring Revenue

Projected ARR
$35,988

Annual Recurring Revenue

Customers
100

Year-end projection

Annual Profit
$35,988

Total profit after tax (Year 1)

Revenue Projection
12-month financial forecast
Customer Growth
Customer acquisition over time
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300 x 250
(Medium Rectangle)
Monthly Breakdown
Current month financial summary
Gross Revenue$2,999
Processing Fees-$0
Operating Expenses-$0
Net Revenue$2,999
Taxes (0%)-$0
Profit After Tax$2,999
Yearly Breakdown
Year-end financial summary
Annual Gross Revenue$35,988
Annual Processing Fees-$0
Annual Operating Expenses-$0
Annual Net Revenue$35,988
Annual Taxes (0%)-$0
Annual Profit After Tax$35,988
Growth Summary
Key performance indicators
Customer Growth Rate0% / month
Monthly Churn Rate0%
Customer Lifetime (Est.)Infinite
Total Customer Growth100 → 100 customers
Average Revenue Per Customer$29.99
Business Metrics
Additional financial insights
Monthly Recurring Revenue$2,999
Annual Run Rate$35,988
Gross Margin100%
Break-even Customers0 customers
Net Profit Margin100%
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300 x 250
(Medium Rectangle)

The Complete Guide to Monthly Recurring Revenue

Master MRR calculations, understand key metrics, and optimize your subscription business with this comprehensive guide.

Table of Contents

What is Monthly Recurring Revenue (MRR)?

Monthly Recurring Revenue (MRR) is the predictable income your subscription business generates each month from active, paying customers. Unlike one-time sales, MRR represents the stable, recurring portion of your revenue that you can count on month after month.

For SaaS companies, subscription businesses, and any organization with recurring revenue streams, MRR serves as the financial heartbeat of your business—providing clear visibility into growth trends, customer retention, and revenue predictability.

Why MRR Matters

MRR provides predictability that traditional revenue models can't match. It enables better cash flow planning, more accurate growth forecasting, and clearer insights into business health.

The MRR Formula: How to Calculate Monthly Recurring Revenue

MRR = Number of Active Customers × Average Revenue Per User (ARPU)

For businesses with multiple pricing tiers, use: MRR = Σ (Monthly Subscription Value per Customer)

Step-by-Step Calculation
1
List all active, paying customers
2
Normalize subscriptions to monthly amounts
3
Sum all monthly subscription values
4
Exclude one-time fees and setup costs
Example Calculation
50 Basic customers ($29/month)$1,450
30 Pro customers ($79/month)$2,370
20 Enterprise ($199/month)$3,980
10 Annual Basic ($290/year)$242
Total MRR$8,042

Types of MRR: Understanding the Components

New MRR

Revenue from brand-new customers acquired during the month.

Expansion MRR

Additional revenue from existing customers through upgrades and add-ons.

Churned MRR

Revenue lost from customers who canceled their subscriptions.

Contraction MRR

Revenue lost from customers through downgrades and removed add-ons.

MRR Distribution Example

MRR vs ARR: Understanding the Difference

MRR (Monthly Recurring Revenue)
  • Measures monthly recurring income
  • Better for short-term planning
  • More granular business view
  • Ideal for early-stage companies
ARR (Annual Recurring Revenue)
  • Measures annual recurring income
  • Better for long-term strategic planning
  • Simpler metric for larger businesses
  • Calculated as: ARR = MRR × 12

When to Use Each Metric

Use MRR when:
  • • You need detailed monthly insights
  • • Making operational decisions
  • • Early-stage company (typically focus on MRR)
  • • Tracking short-term growth trends
Use ARR when:
  • • Annual planning and strategy
  • • Investor reporting and presentations
  • • Mature companies (often emphasize ARR)
  • • Benchmarking against industry standards

What is a Good MRR Growth Rate?

MRR Growth Benchmarks by Company Stage
Monthly growth rate targets for different business stages
15-20%
Early-stage Startups
High growth, finding product-market fit
10-15%
Growing SaaS Companies
Scaling operations and market presence
5-10%
Mature SaaS Companies
Established market position

MRR Growth Rate Formula

MRR Growth Rate = ((Current Month MRR - Previous Month MRR) / Previous Month MRR) × 100

Advanced MRR Calculations

Common MRR Calculation Mistakes to Avoid

Including One-Time Payments

Mistake: Adding setup fees, consulting costs, or one-time purchases to MRR

Solution: Only include recurring subscription revenue

Counting Free Trial Users

Mistake: Including trial users as paying customers

Solution: Only count customers who have converted to paid plans

Not Normalizing Contract Lengths

Mistake: Adding full annual contract value to monthly MRR

Solution: Divide annual contracts by 12, quarterly by 3, etc.

Ignoring Discounts and Promotions

Mistake: Using full price instead of discounted amount

Solution: Calculate MRR based on actual amounts being paid

How to Improve Your MRR

Strategies to Increase New MRR
Optimize marketing campaigns for customer acquisition
Improve conversion rates from trial to paid
Expand into new market segments
Enhance referral programs
Improve product onboarding experience
Optimize pricing strategy

MRR Forecasting and Planning

Short-term Forecasting (1-3 months)
Historical growth trends
Seasonal patterns
Planned marketing campaigns
Known customer expansions
Long-term Forecasting (6-12 months)
Market size and penetration
Competitive landscape changes
Product roadmap impact
Economic factors
MRR Growth Trends
Example growth patterns by company stage

Tools and Systems for MRR Tracking

Spreadsheet-Based

Pros:

  • • Simple and customizable
  • • Low cost
  • • Full control over calculations

Cons:

  • • Manual effort required
  • • Error-prone
  • • Limited scalability
SaaS Metrics Platforms

Examples:

  • • ChartMogul
  • • Baremetrics
  • • ProfitWell

Benefits:

  • • Automated calculations
  • • Advanced analytics
  • • Integration capabilities
Built-in CRM/Billing

Examples:

  • • Salesforce
  • • HubSpot
  • • Stripe

Benefits:

  • • Integrated with existing systems
  • • Real-time data
  • • No additional setup

Frequently Asked Questions

Ready to Master Your MRR?

Understanding and accurately calculating MRR is fundamental to running a successful subscription business. Use our calculator above to get started, and implement these strategies to optimize your recurring revenue.