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MasterMath

MRR and ARR Calculator

With 200 customers at 50 a month you have 10,000 of MRR and 120,000 of ARR. Work out your recurring revenue and your net churn, which is the metric that really predicts whether the business scales.

Currency and number format for

MRR

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MRR—
ARR—
MRR at the end of the month—
Net movement—
Net revenue churn—
Reading—

How this was worked out

    The formula

    MRR = customers × average fee · ARR = MRR × 12

    What it means

    MRR is the revenue that repeats every month without selling anything new, and ARR is that figure annualised. What is interesting is not the level but the movement: how much comes in from new sign-ups, how much from upgrades, and how much is lost to downgrades and cancellations.

    How to work it out by hand

    1. Multiply the active customers by the average fee
    2. Add the MRR from new sign-ups and from upgrades
    3. Subtract what is lost to downgrades and cancellations
    4. Compare that net movement against the MRR you started with

    What is worth knowing

    The metric that separates a good SaaS from an ordinary one is net revenue churn. If the customers who stay upgrade by more than is lost to cancellations, net churn is negative: the company grows in revenue without winning anyone new. That is what lets it scale without depending on marketing. A warning on ARR: multiplying by twelve only makes sense on contracts that genuinely repeat. If the MRR includes one-off payments or project work, the resulting ARR is fiction.

    Frequently asked questions

    What is the difference between MRR and revenue?

    MRR counts only what recurs. A one-off payment, an implementation or a consulting job is billed but is not MRR, because it does not repeat next month.

    What is negative net churn?

    That your existing customers leave you more money each month than you lose to cancellations. It is the best signal of product fit: you grow without acquiring.

    Is ARR the same as annual revenue?

    No. ARR projects the current MRR twelve months forward; annual revenue is what you already billed. They agree only if nothing changes.

    How do I count annual plans?

    Divide the annual amount by twelve to fold it into MRR. Counting it whole in the month of payment distorts the series.