Practical guide
Monthly recurring revenue formula with expansion and churn
Calculate SaaS MRR from a consistent starting base, expansion, and churn without double-counting revenue changes.
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How do you calculate monthly recurring revenue?
For this calculator, MRR equals paying customers × monthly recurring revenue per customer, plus expansion MRR, minus churned MRR. All four inputs must describe one consistent bridge from a starting base to an ending recurring-revenue amount.
Worked MRR example
Assume an illustrative starting base of 200 customers paying an average $100 monthly. Base MRR is $20,000. Existing subscriptions expand by $2,000 of monthly revenue and cancellations remove $1,000. Ending modeled MRR is $21,000.
Enter 200, 100, 2,000, and 1,000 in that order. The calculator separates the base, expansion, and churn components, making the bridge easy to compare with your subscription report.
Avoid counting changes twice
If your exported customer count and average revenue already describe the ending base after upgrades and cancellations, enter expansion and churn as zero. Otherwise, the same changes will be applied twice. In the example, an ending snapshot totaling $21,000 plus another $2,000 minus $1,000 incorrectly reports $22,000.
For several plans, calculate base revenue as the sum of each plan’s customers multiplied by its monthly price. Divide that total by the total customer count to obtain the weighted average for the tool. A simple average of plan prices gives the wrong answer when plan populations differ.
MRR questions
Are setup fees included?
Exclude non-recurring setup work from the recurring base. For example, a $600 onboarding charge plus a $100 monthly subscription contributes $100 to the subscription’s monthly run rate, not $700.
How do annual subscriptions fit?
Normalize the recurring contract value into monthly units before combining it with monthly subscriptions. An illustrative $1,200 annual recurring subscription corresponds to $100 per month. That normalization is a management metric; it does not mean $100 cash is collected each month.
Does this forecast next month’s sales?
No. Inputs describe a chosen revenue state. Model expected new business separately and document whether you include it in the customer base; the tool has no dedicated new-MRR field.
Use the mrr calculator to reproduce the scenario with your own inputs.