MRR Calculator: Monthly and Annual Recurring Revenue
This MRR calculator multiplies your paying customers by average monthly revenue per account to give monthly recurring revenue, then annualizes it to ARR. It is free, needs no signup and runs in your browser.
Customer Acquisition Cost (CAC)
How much you spend, on average, to win one new customer.
Customer Lifetime Value (LTV)
The total gross profit you earn from an average customer before they churn.
LTV : CAC Ratio
The single most-watched SaaS efficiency number. 3:1 is the healthy benchmark.
MRR & ARR
Monthly and annual recurring revenue from your customer base.
Churn Rate
The percentage of customers you lose in a period — and the lifetime it implies.
Customer Retention Rate
The percentage of customers you kept, excluding new ones you added.
SaaS Valuation
A revenue-multiple estimate. Faster growth earns a higher multiple.
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What Is Monthly Recurring Revenue (MRR)?
Monthly recurring revenue is the predictable subscription revenue a SaaS or subscription business earns each month. Unlike one-time sales, MRR carries forward: each month starts from the base the previous month built. Tracking it tells you how fast the business is growing and whether that growth is real or leaking out through churn.
MRR only counts revenue that repeats. Setup fees, one-time charges and unpredictable usage overages are excluded on purpose, because MRR exists to measure the stable base you can forecast.
How to Use This SaaS MRR Calculator
- Count active paying customers at the end of the month. Exclude free trials and free plans.
- Work out ARPA. Divide total normalized monthly subscription revenue by that customer count. Annual plans count as one twelfth per month.
- Enter both numbers and press Calculate. You get MRR and ARR side by side.
MRR Formula and Worked Example
The MRR formula multiplies active customers by ARPA. Annual recurring revenue is that number times twelve.
250 customers at $50 a month ARPA gives $12,500 MRR and $150,000 ARR. If you sum per-customer subscription amounts directly instead, you get the same result as long as annual plans are divided by 12 and one-off fees are left out.
MRR to ARR: When to Use Each
MRR and ARR measure the same recurring revenue over different windows. Founders manage the business on MRR and net new MRR month to month. ARR is the number used in valuation and fundraising conversations, because those are framed in annual terms. Converting is a single multiplication, which is why this page works as an MRR to ARR calculator as well.
The Four Components of MRR
Total MRR is the net of four moving parts. Tracking them separately shows whether growth is healthy or just covering churn:
| Component | What it is |
|---|---|
| New MRR | Revenue from new customers won this period |
| Expansion MRR | Upgrades, added seats and upsells from existing customers |
| Contraction MRR | Downgrades from existing customers |
| Churned MRR | Revenue lost to cancellations |
Net new MRR = New + Expansion − Contraction − Churned. When expansion alone outweighs contraction and churn, you have net negative revenue churn. The calculator gives the total; this breakdown needs your billing data.
How to Calculate MRR Growth Rate
To measure MRR growth, calculate MRR for two consecutive months and compare them:
Moving from $12,500 to $13,750 MRR is 10% month over month growth. There is no single benchmark: an early venture-backed SaaS company and a profitable bootstrapped one will aim for very different rates. Look at net new MRR next to the growth rate, because growth that is mostly replacing churned revenue is not compounding.
How to Increase MRR
- Add new customers. More paying customers at the same ARPA lifts new MRR directly.
- Grow expansion MRR. Higher tiers, added seats and upsells raise ARPA on customers you already have.
- Cut churned MRR. Every dollar you stop losing goes straight into net new MRR. Measure it with the churn rate calculator.
Why ARR Drives SaaS Valuation
Investors value SaaS companies on ARR because it is predictable and compounds. Two companies at the same ARR can be worth very different amounts depending on growth and retention. Estimate a multiple with the SaaS valuation calculator, and check whether each customer pays back what it costs to win with the LTV calculator and CAC calculator.
Common MRR Calculation Mistakes
The usual errors all inflate the number: booking an annual contract as one month of MRR instead of spreading it over twelve, counting setup or onboarding fees as recurring, including usage overages that will not repeat, and counting customers still on a free trial. Keep MRR to recurring, normalized subscription revenue and it stays comparable month to month.
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Frequently Asked Questions
How do you calculate MRR?
Multiply your active paying customers by your average revenue per account per month (ARPA). 250 customers paying an average of $50 a month gives $12,500 MRR. Annual contracts are divided by 12 first, and one-time fees are left out.
How do you convert MRR to ARR?
Multiply MRR by 12. $12,500 MRR is $150,000 ARR. This calculator shows both numbers from the same two inputs, so it works as an MRR to ARR calculator without any extra step.
What is the difference between MRR and ARR?
They measure the same recurring revenue over different windows. MRR is the monthly run rate you use to track momentum; ARR is that figure annualized for valuation, board reporting and fundraising, where the annual number is the convention.
Should annual plans be counted in MRR?
Yes, normalized to a monthly figure. Divide an annual contract by 12 and add that amount to MRR. Booking the whole annual payment in one month inflates that month and makes the trend unreadable.
How do you calculate MRR growth rate?
MRR growth rate = (MRR this month minus MRR last month) divided by MRR last month, times 100. Going from $12,500 to $13,750 is 10% month over month growth. Run this calculator for each month to get the two MRR figures.
What is net new MRR?
Net new MRR = new MRR + expansion MRR minus contraction MRR minus churned MRR. It shows how much the recurring base actually grew after downgrades and cancellations are subtracted.
Is this MRR calculator free?
Yes. It is free with no signup and no limits, and it runs in your browser, so your numbers are not stored or sent anywhere.