See your recurring revenue engine.
Add up your subscription plans to get Monthly Recurring Revenue and ARR, then layer in growth and churn to project where your MRR lands twelve months from now.
Your plans
What your numbers say
Where your MRR comes from
MRR by plan tier
MRR projected over the next year
Milestones
Month-by-month forecast
Each month adds new and expansion MRR and subtracts churn at the rates above. Net new MRR = new + expansion - churned.
| Month | Starting MRR | New + expansion | Churned | Net new | Ending MRR | ARR run rate |
|---|
Recurring revenue, explained
MRR Definition
Sum of all subscription revenue normalized to a monthly figure. Annual subscriptions get divided by 12 to compute MRR contribution. Quarterly billed = quarterly / 3.
MRR Components
New MRR (new customers). Expansion MRR (upgrades). Contraction MRR (downgrades). Churn MRR (cancellations). Net New MRR = New + Expansion - Contraction - Churn.
ARR vs MRR
ARR = MRR × 12. Same metric, different timeframe. ARR is more common at $1M+ revenue (sounds bigger). MRR more useful at early stage (more sensitive to monthly changes).
Tracking MRR Movements
Watch the components separately. Growing ARR with high churn = leaky bucket. Watch expansion MRR: a high net dollar retention rate (>100%) indicates customers expand more than they churn.
Common questions
Should I include one-time fees in MRR?
No, only recurring. Setup fees, professional services, one-time charges go in other revenue line.
How do I handle annual subscriptions?
Divide annual price by 12 for MRR contribution. Some teams use 'bookings' (full annual) separately from MRR.
What's net dollar retention?
Revenue from existing customers (including expansion, minus churn) compared to original. >100% = expanding accounts. 110-120% = strong SaaS.
MRR vs cash collected?
MRR is recognized revenue. Cash collected upfront for annual contracts is bookings. They differ, accrual accounting vs cash.
What MRR growth rate is good?
Early stage: 15-25% monthly. Growth stage: 5-15% monthly. Mature: 2-5% monthly. Top quartile SaaS hits 30%+ monthly in growth phase.
Estimates for planning only. Real MRR depends on your billing terms, actual churn and expansion, discounts, failed payments and seasonality. Only recurring subscription revenue belongs in MRR, one-time fees do not.