Churn Rate Impact Calculator
Free churn rate impact calculator. Visualize the compounding revenue loss from churn, model retention curves, and see the dollar impact of reducing churn by just 1%.
MRR & ARR Calculator
Free MRR and ARR calculator. Break down monthly recurring revenue into new, expansion, contraction, and churned components. Track SaaS revenue health with net MRR movement.
$
$
$
$
Downgrades
$
Cancellations
$
Net New MRR
+$15,000.00
Ending MRR
$115,000.00
ARR
$1,380,000.00
MRR Growth Rate⧉
+15%
Net New / Beginning
Gross Churn Rate⧉
4%
Churned / Beginning
Net Revenue Retention⧉
99%
Net contraction
SaaS Quick Ratio⧉
3.5:1
Good
MRR Bridge
Beginning
$100,000.00
+ New
$15,000.00
+ Expansion
$5,000.00
+ Reactivation
$1,000.00
− Contraction
$2,000.00
− Churned
$4,000.00
Ending
$115,000.00
● Base/Result● Adds● Losses
Movement Composition
New 71%
Expansion 24%
Gross adds breakdown: $21,000.00
12-Month Projection (if growth rate holds)
| Month | Projected MRR | Projected ARR |
|---|---|---|
| 0 | $115,000.00 | $1,380,000.00 |
| 3 | $174,901.00 | $2,098,807.00 |
| 6 | $266,002.00 | $3,192,024.00 |
| 9 | $404,556.00 | $4,854,669.00 |
| 12 | $615,279.00 | $7,383,345.00 |
Assumes constant 15% monthly growth rate. Real growth typically decelerates.
MRR should only include recurring subscription revenue. Exclude one-time fees, services, and variable usage charges.
Planning notes, formulas, and examples
About the MRR & ARR Calculator
Monthly Recurring Revenue (MRR) is the lifeblood metric for subscription businesses. MRR = sum of all active subscriptions, normalized to a monthly figure. ARR = MRR × 12. But the total number only tells half the story — what matters is how MRR moves.
MRR breaks down into five components: New MRR (new customers), Expansion MRR (upsells, cross-sells), Reactivation MRR (returning customers), Contraction MRR (downgrades), and Churned MRR (cancellations). Net New MRR = New + Expansion + Reactivation − Contraction − Churned.
This calculator computes all MRR components, ARR, net revenue retention (NRR), and projects MRR growth over time. MRR is calculated by summing the recurring revenue from all active subscriptions in a given month, while ARR simply multiplies MRR by 12 to provide an annualized view. Understanding the components of MRR change including new subscriptions, expansions, contractions, and cancellations reveals whether growth is healthy, sustainable, and accelerating over time.
When This Page Helps
Investors, boards, and operators all judge SaaS businesses by MRR trends and composition. A business growing MRR 10% monthly with high churn is fragile. One growing 5% with low churn and strong expansion is far healthier. This calculator makes MRR composition visible and forward-looking. Tracking MRR components monthly reveals whether growth is driven by healthy expansion or unsustainable new-customer acquisition.
How to Use the Inputs
- Enter beginning MRR for the period.
- Enter new MRR from new customers.
- Enter expansion MRR from upsells/upgrades.
- Enter reactivation MRR (optional, for returning customers).
- Enter contraction MRR from downgrades.
- Enter churned MRR from cancellations.
- View net new MRR, ending MRR, ARR, and key ratios.
Formula used
Net New MRR = New + Expansion + Reactivation − Contraction − Churned
Ending MRR = Beginning MRR + Net New MRR
ARR = MRR × 12
Gross Churn Rate = Churned MRR / Beginning MRR
Net Revenue Retention = (Beginning − Contraction − Churned + Expansion) / Beginning × 100%Example Calculation
Result: Net New MRR: +$15,000 | Ending MRR: $115,000 | NRR: 99%
Net New = $15K + $5K + $1K − $2K − $4K = $15K. Ending MRR = $100K + $15K = $115K. Gross churn = $4K/$100K = 4%. NRR = ($100K − $2K − $4K + $5K)/$100K = 99%. Growth rate = 15%. ARR = $1.38M.
Tips & Best Practices
- Net revenue retention (NRR) > 100% means you're growing even without new customers. Top SaaS companies achieve 120-140%.
- Track MRR movements monthly, not just the total. A $200K MRR business could be healthy or dying depending on the components.
- New MRR is exciting but expensive. Expansion MRR is often the cheapest revenue source — invest in upselling.
- Contraction MRR often precedes churn. Monitor it as an early warning signal.
- Normalize annual contracts to monthly: a $12K annual deal = $1K MRR, counted from the start date.
- Quick ratio (New + Expansion) / (Contraction + Churned) > 4 indicates efficient growth.
MRR Components Explained
New MRR is revenue from first-time customers. Expansion MRR comes from existing customers upgrading, adding seats, or purchasing add-ons. Reactivation MRR is from previously churned customers returning. Contraction MRR is lost when customers downgrade. Churned MRR is permanently lost when customers cancel. Understanding each component drives targeted action: if churned MRR is high, invest in retention; if expansion is low, invest in upselling.
The ARR Journey
SaaS startups track milestones: $1M ARR (product-market fit signal), $10M ARR (scaling), $100M ARR (public-ready). Time from $1M to $10M ARR is the key test — top companies do it in 3-5 years. Monthly MRR tracking with component granularity is essential for forecasting the path to each milestone.
MRR Accounting Nuances
Discounted plans should count at the discounted rate, not full price. Free trials count $0 MRR until converted. Multi-year deals: use the annual rate divided by 12. If pricing includes a one-time setup fee, exclude it from MRR. Always be consistent and document your MRR policy.
Sources & Methodology
Last updated:
Methodology
This worksheet starts with beginning MRR, adds new, expansion, and reactivation MRR, subtracts contraction and churned MRR, and reports the resulting net-new MRR and ending MRR. ARR is then annualized as ending MRR multiplied by 12, and NRR is calculated from the existing-customer base after contraction, churn, and expansion.
The page is a recurring-revenue worksheet rather than an accounting-revenue model. It assumes the user has already normalized the inputs to recurring monthly values and excluded one-time revenue, services revenue, or other non-recurring items.
Sources
- Chart: Monthly Recurring Revenue (MRR) (ChartMogul) — ChartMogul reference on how MRR is normalized from recurring subscription activity.
- Chart: Annual Run Rate (ARR) (ChartMogul) — ChartMogul reference defining ARR as annualized MRR.
- Understanding MRR movements (ChartMogul) — ChartMogul definitions for new business, expansion, contraction, churn, and reactivation movements.
Frequently Asked Questions
MRR counts only recurring subscription revenue, normalized to monthly. It excludes one-time fees, professional services, and variable usage charges. Accounting revenue (GAAP/IFRS) follows different recognition rules. MRR is an operating metric, not an accounting metric.
Divide the annual contract value by 12. A $24K/year contract = $2K MRR. Count it from the contract start date. Some companies book the full amount as "committed ARR" but spread it as MRR over the term.
Quick Ratio = (New MRR + Expansion MRR) / (Contraction MRR + Churned MRR). It measures growth efficiency. A ratio > 4 means you're adding $4 for every $1 lost. Top SaaS companies maintain 4:1 or higher. Below 1:1 means the business is shrinking.
NRR measures revenue from existing customers after churn, contraction, and expansion. NRR = (Beginning MRR − Churn − Contraction + Expansion) / Beginning MRR × 100%. NRR > 100% = net expansion. Best-in-class SaaS: 120-140%.
Apply your current growth rate forward: Future MRR = Current MRR × (1 + monthly growth rate)^months. But this oversimplifies — growth rates typically slow as the base grows. Model conservatively by reducing the growth rate 0.5-1% per quarter.
Track both. Committed MRR includes signed contracts not yet activated. Live MRR counts only active, billing subscriptions. The gap between them reveals onboarding/activation delays. Investors focus on live MRR, but committed MRR shows pipeline health.