Team Churnkey
This guide introduces two interactive SaaS MRR calculators: one simple and one advanced. Both tools let you calculate MRR in real time, using essential inputs to analyze Net New MRR, Contraction, Churn, ARPU, and other key components that impact your bottom line.
Simple MRR Formula:
MRR = Total Number of Active Customers × Average Revenue per Customer
Advanced MRR Formula:
ARR = Gross New MRR + Expansion MRR + Reactivation MRR − Contraction MRR − Churn MRR + Previous Month's MRR
Components of an MRR calculator
- Gross New MRR
Represents the MRR generated from new customers in a given month. - Expansion MRR
Measures the added revenue from existing customers, including upgrades or additional products purchased. - Contraction MRR
Captures the MRR lost due to downgrades, such as customers reducing their subscription plans or seat counts. - Churn MRR
The totalMRR lost from customers who cancel their subscriptions. - Reactivation MRR
Revenue from customers who re-subscribe after canceling. - Previous MRR
The total MRR from the last period, serving as a base to build on. - Total Number of Active Customers
Total number of customers that have paid money in that month. - Average Revenue per Customer
Revenue each of the customers paid that given month.
SaaS MRR calculator: simple and advanced
Enter your figures to instantly calculate MRR based on these components. Adjust any input, and see how each change affects your bottom line.
Simple MRR calculator
MRR = active customers × ARPU
Monthly recurring revenue
$25,000
Annual recurring revenue
$300,000 / yr
Advanced MRR calculator
Net New MRR
$75,000
New + Expansion + Reactivation − Contraction − Churn
Total MRR
$775,000
Previous MRR + Net New MRR
Total ARR
$9,300,000
Total MRR × 12
A higher churn rate directly lowers MRR. At your current churn rate you're losing 26% of your recurring revenue every year — even a small reduction can significantly boost MRR.
| Churn rate | MRR |
|---|---|
| Decrease by 2% | $789,000 |
| Decrease by 4% | $803,000 |
| Decrease by 5% | $810,000 |
| Decrease by 7% | $824,000 |
Would you like to decrease churn?
Churn has two parts: voluntary and involuntary — you lose either customers (#) or revenue ($). The best way to cut voluntary churn is a great Cancel Flow with trial extensions, pause walls, and offers personalized to each user. Then tackle involuntary churn with Precision Retries, dunning email campaigns, and Reactivations.
Churnkey has a free churn-metrics product to help you understand your numbers, and our full retention platform saves 20–40% of the customers you'd otherwise lose to churn.
Explore ChurnkeyAdvanced MRR calculator formula explanation
Suppose you have the following metrics for this month:
- Gross New MRR = $2,00,000
- Expansion MRR = $60,000
- Contraction MRR = $10,000
- Churn MRR = $180,000
- Reactivation MRR = $5,000
- Previous MRR = $700,000
Here’s how these components contribute to your Total MRR and Net New MRR:
Calculating Net New MRR:
Net New MRR = Gross New MRR + Expansion ARR + Reactivation MRR − Contraction MRR − Churn MRR = 75,000
Calculate Total MRR:
Total MRR = Previous month's MRR + Net New MRR = 775,000
How Churnkey can help improve MRR?
We’re everything your customer-obsessed team needs to improve retention, automatically. With Churnkey, companies save 20-40% of the revenue they would have otherwise lost to churn. If you aren't yet sure how retention impacts your business, use our free churn metrics product.
To improve your MRR, sign up for Churnkey or book a demo.
MRR benchmarks
After Launching
| Time to $100k MRR | Good | Great |
|---|---|---|
| After Launching | 1 year | 9 months |
After $100k MRR
| Year | Good Growth Rate | Great Growth Rate |
|---|---|---|
| Year 1 | 3x YoY (10% MoM) | 5x YoY (16% MoM) |
| Year 2 | 3x YoY (10% MoM) | 4x YoY (12% MoM) |
| Year 3 | 2x YoY (5% MoM) | 3x YoY (10% MoM) |
| Year 4 | 2x YoY (5% MoM) | 2.5x YoY (8% MoM) |
| Year 5 | 2x YoY (5% MoM) | 2.5x YoY (8% MoM) |
By Funding Round
| Funding Round | Good Growth Rate | Great Growth Rate | Below Expectations |
|---|---|---|---|
| Series A | $100k MRR, 2-3x YoY | $100k MRR, 3x+ YoY | <$100k MRR, <2x YoY |
| Series B | $500k MRR, 2-3x YoY | $500k MRR, 3x YoY | <$500k MRR, <2x YoY |
| Series C+ | $2M MRR, 1-2x YoY | $2M MRR, 2-3x YoY | <$2M MRR, <1x YoY |
Additional reading
Retention Cohort Analysis: Four Simple Ways
Retention automation separates growth heroes from growth zeroes
Calculate Customer Retention Rate and Revenue Retention [Calculator]
Customer Retention Curve: Calculator, Definition, Examples
Customer Exit Survey: 21 Templates, Questions, and Best Practices
Understanding the FTC’s New Negative Option Rule and Its Impact on Free Trials