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Activity
Free revenue tool

Calculate Your Monthly Recurring Revenue

See what is growing or shrinking your recurring revenue. Turn this month's customer changes into a clear view of revenue and retention.

No account requiredRuns in your browserReviewed July 25, 2026
Open the plain-text guide
Revenue inputs

Build the monthly waterfall

Annual contracts are normalized to monthly recurring revenue by dividing booked annual recurring revenue by 12.

Your MRR waterfall will appear here

Separate acquisition, expansion, contraction, and churn to see what actually moved recurring revenue.

How to use

How to calculate MRR

  1. 1

    Enter starting recurring revenue

    Add the MRR at the beginning of the period and any newly booked annual recurring revenue that should be normalized monthly.

  2. 2

    Add the revenue movements

    Enter new and expansion MRR, then enter contraction and churned MRR for the same reporting period.

  3. 3

    Read each part of your MRR

    Review ending MRR, ARR, net new MRR, growth, gross revenue retention, and net revenue retention together.

Why this matters

See what is driving recurring growth

A single revenue total can hide churn or contraction. Breaking down monthly movement shows which part of the business needs attention before growth stalls.

Guide

How to calculate and interpret monthly recurring revenue

How the MRR calculator works

Monthly recurring revenue is the normalized monthly value of active recurring subscriptions. This calculator starts with the prior period's MRR, adds new and expansion MRR, then subtracts contraction and churned MRR to produce ending MRR.

Revenue from a newly booked annual subscription is divided by 12 before it enters the waterfall. Ending annual recurring revenue is the ending MRR run rate multiplied by 12. Neither metric is the same as cash collected or recognized accounting revenue.

  • New MRR comes from customers starting a recurring subscription during the period.
  • Expansion MRR comes from upgrades, added seats, or other increases from existing customers.
  • Contraction MRR comes from downgrades while churned MRR comes from canceled recurring subscriptions.
  • One-time setup, services, and usage fees should not enter MRR unless they are contractually recurring.

Read growth, gross retention, and NRR together

Monthly growth divides net new MRR by starting MRR. Gross revenue retention measures how much starting MRR remained after contraction and churn, without allowing expansion to hide losses. Net revenue retention adds expansion back to show whether the existing customer base grew or shrank in aggregate.

A growing ending balance can still conceal weak retention when new acquisition replaces heavy churn. Keep the waterfall visible so acquisition, expansion, contraction, and churn remain separate operating questions.

Choose consistent MRR rules before reporting

Document how you treat discounts, credits, paused plans, currency conversion, usage-based commitments, taxes, and delinquent accounts. The most useful recurring-revenue report is consistent from one period to the next and can be reconciled to customer-level subscription records.

Use the same period boundaries for every movement. A cancellation and reactivation inside one month should not be classified differently merely because it makes growth look better. Save the summary with the source data and record any change in policy.

Questions

Questions about monthly recurring revenue

How do I calculate MRR?

Start with prior-period MRR, add new MRR and expansion MRR, then subtract contraction and churned MRR. Normalize annual recurring contracts to one-twelfth of their annual recurring value before adding them. Exclude one-time revenue.

What is the difference between MRR and ARR?

MRR is a monthly recurring run rate. ARR is commonly the recurring run rate expressed annually, usually MRR multiplied by 12. Neither is automatically equal to cash collected or revenue recognized under accounting rules.

What is net revenue retention?

NRR compares recurring revenue from the starting customer base after expansion, contraction, and churn with starting MRR. New-customer MRR is excluded. A result above 100% means expansion exceeded contraction and churn for that base.

Should annual subscriptions count in MRR?

Yes, when they represent recurring subscription revenue. Divide the annual recurring amount by 12. Do not put the entire annual invoice into a single month's MRR, and keep one-time fees out of the calculation.

What revenue should not count as MRR?

Exclude one-time setup fees, services, hardware, taxes, and other nonrecurring charges. Usage revenue belongs only when your documented reporting policy treats a committed amount as recurring.

Can MRR be negative?

Ending MRR should not fall below zero, but net new MRR can be negative when contraction and churn exceed new and expansion revenue during the period.

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