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MRR Calculator

Monthly recurring revenue is the number a subscription business is actually valued on. It is not total revenue: it strips out one-off sales and spreads annual contracts evenly across twelve months.

Monthly recurring revenue

$14,283.33

Annual run rate
$171,400.00
Net new MRR
$400.00
Revenue per account
$49.25

Values update as you type. This calculator covers the single scenario its formula assumes — see Common Mistakes for what it leaves out.

The formula this calculator uses

MRR = monthly plans + annual plans / 12 + expansion - churn

monthly plans
Subscribers billed every month, times the monthly price
annual plans
Subscribers billed yearly, times the annual price divided by twelve
expansion
Extra recurring revenue from upgrades and seat additions
churn
Recurring revenue lost to cancellations and downgrades

How to check the result by hand

  1. 1

    Separate recurring from one-off revenue

    Setup fees, services and hardware are excluded. Only contracts that repeat on a schedule belong in the calculation, and mixing the rest in destroys the number's predictive value.

  2. 2

    Normalise annual plans to a month

    Divide the annual contract value by twelve. A four hundred and ninety pound annual plan contributes about forty one pounds a month, not four hundred and ninety in the month it is signed.

  3. 3

    Add the monthly plans

    Subscribers billed every month contribute their price directly. Two hundred and fifty at forty nine pounds is twelve thousand two hundred and fifty.

  4. 4

    Add expansion and subtract churn

    Upgrades add to the total and cancellations subtract from it. In the default example twelve hundred of expansion and eight hundred of churn leave a net four hundred.

  5. 5

    Multiply by twelve for ARR

    The same figure on an annual basis. Fourteen thousand two hundred and eighty three a month is one hundred and seventy one thousand four hundred a year.

For worked examples, common mistakes and the limits of this formula, read the full How To Calculate MRR page.