SaaS MRR Calculator
Project your Monthly Recurring Revenue over 6-12 months. Enter your subscription price, churn rate, and new customers per month to get your growth forecast.
Understanding MRR for SaaS
What is Monthly Recurring Revenue?
MRR (Monthly Recurring Revenue) is the predictable total revenue your business expects to receive every month from active subscriptions. It's the cornerstone metric for SaaS businesses, calculated by multiplying your number of paying customers by your average revenue per user (ARPU). Unlike one-time sales, MRR provides visibility into your business's predictable income.
Key factors that influence MRR
- Subscription price — The amount you charge per customer per month. Higher prices mean faster MRR growth but may reduce conversion rates.
- Churn rate — The percentage of customers who cancel each month. Lower churn means more revenue retention. A 5% monthly churn means you lose 5% of your MRR every month.
- New customer acquisition — The number of new paying customers you add each month. This is your growth engine.
- Expansion revenue — Upgrades and add-ons from existing customers (not included in this calculator but important for mature SaaS).
MRR vs ARR
ARR (Annual Recurring Revenue) is simply MRR × 12. Investors and enterprise deals often use ARR. For example, $5,000 MRR equals $60,000 ARR. Some businesses also track NRR (Net Revenue Retention) which accounts for expansions and churn combined.
Frequently Asked Questions
MRR (Monthly Recurring Revenue) is the total predictable revenue your business expects to receive every month from active subscriptions. It's calculated by multiplying the number of paying customers by the average revenue per user (ARPU). MRR is a key SaaS metric that helps entrepreneurs forecast growth and measure business health.
A good monthly churn rate for SaaS typically ranges between 2% and 5% for B2B, and 5% to 8% for B2C. Enterprise SaaS often aims for under 2% monthly churn. High churn indicates product-market fit issues or customer satisfaction problems. Reducing churn by even 1% can significantly impact your MRR growth.
MRR (Monthly Recurring Revenue) represents your recurring revenue per month, while ARR (Annual Recurring Revenue) is MRR multiplied by 12. ARR is often used for enterprise deals and investor reporting. For example, $10,000 MRR equals $120,000 ARR.
Churn directly reduces your MRR each month. When customers cancel, you lose their recurring revenue. If you add 20 new customers but lose 15 (high churn), your net growth is minimal. The formula is: New MRR = (Previous MRR × (1 - Churn Rate)) + (New Customers × Price). Lowering churn is often more cost-effective than acquiring new customers.
MRR is crucial because it provides predictable revenue visibility, helps with financial planning, and is the primary metric investors use to value SaaS companies. It allows you to forecast cash flow, set realistic growth targets, and identify trends in customer acquisition and retention.