Monthly Recurring Revenue (MRR) Calculator
Use this simple tool to calculate your total Monthly Recurring Revenue (MRR) by summing up the monthly value of all your active subscriptions.
Enter Monthly Subscription Amounts
Understanding Monthly Recurring Revenue (MRR)
What is MRR?
Monthly Recurring Revenue (MRR) is a key metric for subscription-based businesses. It is the total predictable revenue generated from all active subscriptions in a specific month. It standardizes revenue into a monthly figure, regardless of billing terms (e.g., quarterly or annual plans are converted to their monthly equivalent).
Why is MRR Important?
MRR is crucial for:
- Forecasting: Provides a reliable basis for predicting future revenue.
- Growth Measurement: Helps track the health and growth trajectory of the business.
- Valuation: Often used by investors to assess the value of a subscription company.
- Decision Making: Informs strategic decisions regarding sales, marketing, and product development.
How to Calculate Simple MRR
For its most basic calculation, MRR is simply the sum of the standardized monthly payments from all active, paying customers.
MRR = Sum of all active customers' monthly subscription fees
More advanced MRR tracking considers nuances like:
- New MRR: Revenue from new customers in the period.
- Expansion MRR: Additional revenue from existing customers (upgrades, add-ons).
- Churn MRR: Revenue lost from canceled subscriptions.
- Contraction MRR: Revenue lost from downgrades.
This simple calculator focuses on the core "Gross MRR" or the total revenue stream assuming a snapshot in time, without breaking it down by source (new, expansion, etc.).
What to Include and Exclude
- Include:
- Standard, recurring subscription fees.
- Recurring add-on fees.
- Annual or quarterly fees amortized to a monthly value (e.g., $1200 annual plan adds $100 to MRR).
- Exclude:
- One-time fees (setup fees, consulting, services).
- Non-recurring usage fees.
- Trial revenue (unless they convert to paid).
- Taxes.
MRR Calculation Examples
Click on an example to see the breakdown:
Example 1: Simple Monthly Plans
Scenario: A SaaS company has three customers paying monthly.
Subscriptions: Customer A: $50/month, Customer B: $120/month, Customer C: $80/month.
Calculation: MRR = $50 + $120 + $80
Result: MRR = $250
Example 2: Mix of Monthly and Annual Plans
Scenario: Three customers with different billing cycles.
Subscriptions: Customer A: $100/month, Customer B: $600/year, Customer C: $30/month.
Calculation: Convert annual to monthly: $600/year = $50/month. MRR = $100 + $50 + $30.
Result: MRR = $180
Example 3: Adding New Customers
Scenario: Starting MRR is $500. Two new customers sign up this month.
New Subscriptions: Customer D: $75/month, Customer E: $40/month.
Calculation: Total MRR = Starting MRR + New MRR. MRR = $500 + $75 + $40.
Result: MRR = $615
Example 4: Ignoring One-Time Fees
Scenario: A customer pays a setup fee and a monthly fee.
Payment: Customer F: $200 setup fee (one-time) + $60/month subscription.
Calculation: Ignore the one-time fee. Only include the recurring part. MRR contribution = $60.
Result (for this customer's contribution): MRR = $60
Example 5: Multiple Subscriptions per Customer
Scenario: One customer has multiple active recurring services.
Customer G: Basic Plan: $25/month, Add-on Feature: $10/month.
Calculation: Sum the recurring parts for this customer. MRR contribution = $25 + $10.
Result (for this customer's contribution): MRR = $35
Example 6: Quarterly Billing
Scenario: A customer is on a quarterly billing cycle.
Subscription: Customer H: $300/quarter.
Calculation: Convert quarterly to monthly: $300 / 3 months = $100/month. MRR contribution = $100.
Result (for this customer's contribution): MRR = $100
Example 7: Enterprise Plan
Scenario: A large client is on a custom enterprise plan billed annually.
Subscription: Customer I: $12,000/year.
Calculation: Convert annual to monthly: $12,000 / 12 months = $1000/month. MRR contribution = $1000.
Result (for this customer's contribution): MRR = $1000
Example 8: Small Subscriptions
Scenario: Multiple customers on a low-cost plan.
Subscriptions: Customer J: $5/month, Customer K: $5/month, Customer L: $5/month, Customer M: $5/month, Customer N: $5/month.
Calculation: MRR = $5 + $5 + $5 + $5 + $5.
Result: MRR = $25
Example 9: Starting from Scratch
Scenario: A brand new business with its first two paying customers.
Subscriptions: Customer O: $29/month, Customer P: $49/month.
Calculation: MRR = $29 + $49.
Result: MRR = $78
Example 10: Mixed Plans
Scenario: A company with various plan types.
Subscriptions: Customer Q: $99/month, Customer R: $199/month, Customer S: $499/year (monthly equivalent: $41.58).
Calculation: MRR = $99 + $199 + $41.58.
Result: MRR = $339.58
Frequently Asked Questions about MRR
1. What exactly does MRR stand for?
MRR stands for Monthly Recurring Revenue. It's a metric used primarily by subscription-based businesses.
2. Why is MRR a key metric?
It provides a standardized, predictable measure of revenue from subscriptions, essential for financial forecasting, tracking growth, and valuing the business.
3. Does MRR include one-time setup fees?
No, MRR should only include revenue that is recurring and predictable on a monthly basis. One-time fees, consulting fees, or usage-based fees are typically excluded.
4. How do I handle annual or quarterly subscriptions in MRR?
You should normalize them to a monthly value. For example, an annual plan of $1200 contributes $100 ($1200 / 12) to your MRR.
5. Is MRR the same as ARR?
No. MRR is Monthly Recurring Revenue. ARR is Annual Recurring Revenue. ARR is often calculated as MRR multiplied by 12 (ARR = MRR * 12).
6. Should trial customers be included in MRR?
Generally, revenue from free trials or unpaid pilots is not included in MRR until they convert to a paying subscription.
7. What is "New MRR"?
New MRR is the recurring revenue added by brand new customers acquired during a specific period.
8. What is "Expansion MRR"?
Expansion MRR is the *additional* recurring revenue generated from existing customers, for example, through upgrades or purchasing add-ons.
9. What is "Churn MRR"?
Churn MRR is the amount of recurring revenue lost from customers who cancel their subscriptions.
10. How is "Net MRR Churn" calculated?
Net MRR Churn considers both lost revenue (Churn MRR + Contraction MRR) and gained revenue from existing customers (Expansion MRR). Net MRR Churn = Churn MRR + Contraction MRR - Expansion MRR. A negative net churn means your expansion revenue from existing customers outweighs the revenue lost from churn and downgrades.
