What is MRR and how do you calculate it?

MRR (Monthly Recurring Revenue) is the predictable revenue your SaaS business earns each month from subscriptions. The basic formula is: MRR = Average Revenue Per User (ARPU) × Total Number of Active Customers. For example, if you have 100 customers paying an average of $50/month, your MRR is $5,000.

What's the difference between MRR and ARR?

MRR measures monthly recurring revenue while ARR (Annual Recurring Revenue) measures yearly. To convert: ARR = MRR × 12. Use MRR for operational decisions and month-over-month tracking. Use ARR for fundraising, annual planning, and comparing against enterprise SaaS benchmarks.

What are the different types of MRR?

There are 5 key MRR components: (1) New MRR - revenue from new customers, (2) Expansion MRR - upgrades and add-ons from existing customers, (3) Churned MRR - lost revenue from cancellations, (4) Contraction MRR - downgrades from existing customers, (5) Net New MRR = New + Expansion - Churned - Contraction.

What is a good MRR growth rate for SaaS?

Healthy MRR growth rates vary by stage: Pre-seed/Seed: 15-20% month-over-month is excellent. Series A: 10-15% MoM. Series B+: 5-10% MoM. Top-quartile SaaS companies grow 2-3x faster than median.

What is Quick Ratio and why does it matter?

Quick Ratio = (New MRR + Expansion MRR) / (Churned MRR + Contraction MRR). It measures growth efficiency. A Quick Ratio above 4 is excellent, 2-4 is healthy, and below 1 means you're shrinking. It's a critical metric for SaaS health that many founders overlook.

Should I include one-time fees in MRR?

No. MRR should only include predictable, recurring subscription revenue. Exclude: setup fees, one-time purchases, professional services, and variable usage charges (unless contracted minimums). Including non-recurring revenue inflates MRR and misleads investors.

MRR Calculator

Calculate your MRR instantly. Free calculator for SaaS metrics including Net MRR, ARR conversion, Quick Ratio, and growth projections.

Enter Your Values

Total Active Customers*

customers

Number of paying subscribers at end of month

Average Revenue Per User (ARPU)*

Total MRR ÷ Total Customers, or your average subscription price

New Customers This Month

customers

Customers acquired this month

Expansion Revenue

Additional revenue from upgrades, add-ons, seat expansions

Churned Customers

customers

Customers who cancelled this month

Contraction Revenue

Revenue lost from downgrades (not cancellations)

Formula

MRR = Total Customers × ARPU

Monthly Recurring Revenue is your predictable subscription revenue each month. Net New MRR shows actual growth after accounting for new sales, expansions, and losses.

Monthly Recurring Revenue (MRR)$5,000

$60K ARR — early stage, focus on product-market fit.

ARR$60,000

Net New MRR$800

New MRR$750

Expansion MRR$500

Churned MRR-$250

Customer Churn5.0%

Contraction MRR-$200

MRR Growth+16.0%

Quick Ratio2.8

How Does Your MRR Growth Compare?

ShrinkingNegative growth — churn exceeds new revenue

< -$0

Stagnant0-5% monthly growth — needs acceleration

$0 – $5

Healthy5-10% monthly growth — typical Series A pace

$5 – $10

Strong10-20% monthly growth — top quartile performance

$10 – $20

Exceptional20%+ monthly growth — hypergrowth territory

> $20

Source: OpenView SaaS Benchmarks 2024

How to Calculate MRR

Enter your total number of active paying customers
Enter your Average Revenue Per User (ARPU) — your average subscription price
Optionally add new customers, expansion revenue, churned customers, and contraction revenue
View your MRR, ARR, Net New MRR, and Quick Ratio instantly
Compare your growth rate against SaaS industry benchmarks
Chat with our AI SaaS Analyst for personalized growth strategies

SaaS MRR Growth Benchmarks

15-20% MoM

Seed Stage Growth

10-15% MoM

Series A Growth

5-10% MoM

Series B+ Growth

Quick Ratio (Excellent)

2-4

Quick Ratio (Healthy)

3-5% monthly

Median Churn Rate

Source: OpenView SaaS Benchmarks 2024

MRR Calculator

How Does Your MRR Growth Compare?

How to Calculate MRR

SaaS MRR Growth Benchmarks

Frequently Asked Questions

What is MRR and how do you calculate it?

What's the difference between MRR and ARR?

What are the different types of MRR?

What is a good MRR growth rate for SaaS?

What is Quick Ratio and why does it matter?

Should I include one-time fees in MRR?