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MRR Calculator

Calculate your Monthly Recurring Revenue (MRR) and Annual Recurring Revenue (ARR). Track new, expansion, churned, and contraction MRR with SaaS Quick Ratio benchmarks.

About this tool

Monthly Recurring Revenue is the lifeblood metric for any subscription business. Understanding your MRR composition — new customers, expansions, contractions, and churn — gives you a clear picture of growth health. The Quick Ratio (new + expansion divided by churn + contraction) is one of the fastest ways to assess whether your business is growing sustainably. Pair this with our churn rate calculator and customer lifetime value calculator to build a complete picture of your SaaS economics. Once you understand your revenue dynamics, use email ROI tracking to measure how marketing contributes to growth.

Frequently Asked Questions

What is MRR (Monthly Recurring Revenue)?

MRR is the predictable revenue your business earns every month from active subscriptions. It's calculated by summing the monthly value of all active subscriptions. Annual plans are divided by 12 to get their monthly contribution. MRR excludes one-time fees, setup charges, and non-recurring revenue.

What is a good SaaS Quick Ratio?

A Quick Ratio above 4.0 is considered world-class — you're adding revenue 4x faster than you're losing it. Between 2.0-4.0 is healthy growth. Between 1.0-2.0 means you're growing but have a leaky bucket. Below 1.0 means you're shrinking. Most successful SaaS companies target a Quick Ratio of at least 3.0.

How do I calculate ARR from MRR?

ARR (Annual Recurring Revenue) is simply MRR × 12. For example, if your MRR is $50,000, your ARR is $600,000. ARR is commonly used by investors and for annual planning, while MRR is better for tracking month-to-month growth trends.

What's the difference between new MRR and expansion MRR?

New MRR comes from brand-new customers signing up for the first time. Expansion MRR comes from existing customers upgrading to higher plans, adding seats, or purchasing add-ons. Both contribute to growth, but expansion MRR is often more cost-effective since it doesn't require customer acquisition spend.

What is Net New MRR?

Net New MRR = New MRR + Expansion MRR - Churned MRR - Contraction MRR. It represents the actual change in your recurring revenue for the period. Positive Net New MRR means your business is growing; negative means it's shrinking. This is one of the most important metrics for subscription businesses.

How should I handle annual subscriptions in MRR?

Divide annual subscription revenue by 12 to get the monthly MRR contribution. For example, a $1,200/year plan contributes $100/month to MRR. This normalization allows you to compare monthly and annual plans on equal footing and track growth trends consistently.

What MRR growth rate should I target?

Early-stage startups often see 15-20% month-over-month MRR growth. As companies scale, 5-10% monthly growth is strong. At scale ($10M+ ARR), even 2-3% monthly growth is healthy. The key is consistent, sustainable growth rather than spiky bursts. Track your growth rate alongside your Quick Ratio for a complete picture.

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