People type this into search every day: MRR calculator.
Monthly recurring revenue is the run-rate you expect to bill again next month. Annual recurring revenue, on this page, is that ending month times 12. The SEC’s beginners’ guide to financial statements describes revenue as a figure on a period’s income statement. MRR is a planning run-rate, not that GAAP line, and not the cash in the bank.
The monthly recurring revenue calculator uses four boxes:
Ending MRR = starting MRR + new MRR + expansion MRR − churned MRR
Net new MRR = new MRR + expansion MRR − churned MRR
ARR = ending MRR × 12
New MRR is recurring revenue from customers who were not in the starting book. Expansion is extra recurring revenue from customers who were. Churned MRR is recurring revenue that left. A one-off invoice stays out. SBA’s manage your business guide is about tracking the customers and revenue you have for a period you choose. These boxes are that kind of input.
The share of customers who left is the churn rate calculator. The churn post puts lost customers next to lost MRR. Months of cash left, once spending outruns cash coming in, are the cash runway calculator. The cash runway post walks that model. MRR is not the cash balance in it. A profit margin on a period’s books is covered in the net profit post.
These are labeled examples of the run-rate formula. They are not a forecast, a GAAP revenue total, or business advice.
Fig 1
Starting MRR to ARR
New and expansion add. Churn subtracts. ARR multiplies the ending month by 12.
Ending MRR is the starting book plus new MRR plus expansion MRR, minus churned MRR. ARR is that ending figure times 12.
Example 1. The published month
- Starting MRR: $20,000
- New MRR: $4,000
- Expansion MRR: $1,000
- Churned MRR: $2,000
Ending MRR = 20,000 + 4,000 + 1,000 − 2,000 = $23,000.00.
Net new MRR = 4,000 + 1,000 − 2,000 = $3,000.00.
ARR = 23,000 × 12 = $276,000.00.
Calculator result
Monthly recurring revenue
- Starting monthly recurring revenue
- $20,000.00
- New MRR this period
- $4,000.00
- Expansion MRR this period
- $1,000.00
- Churned MRR this period
- $2,000.00
$23,000.00
ending monthly recurring revenue
- Annual recurring revenue
- $276,000.00
- Net new MRR
- $3,000.00
- Starting MRR
- $20,000.00
The book grew by $3,000 in the month. Annualizing that ending month, and only that month, produces $276,000. It does not add up twelve different months. A seasonal business that types a strong month will see a strong ARR, because the formula multiplies whatever month you typed.
Example 2. What if churn doubles?
Keep the starting book at $20,000, new MRR at $4,000, and expansion at $1,000. Churned MRR moves from $2,000 to $4,000.
Ending MRR = 20,000 + 4,000 + 1,000 − 4,000 = $21,000.00.
Net new MRR = 4,000 + 1,000 − 4,000 = $1,000.00.
ARR = 21,000 × 12 = $252,000.00.
The extra $2,000 of churn cuts ending MRR by $2,000, from $23,000 to $21,000. ARR falls by 2,000 × 12 = $24,000, from $276,000 to $252,000. A monthly leak shows up twelve times in this ARR definition, because ARR is 12 times the ending month.
Calculator result
Monthly recurring revenue
- Churned MRR this period
- $4,000.00
$21,000.00
ending monthly recurring revenue
- Annual recurring revenue
- $252,000.00
- Net new MRR
- $1,000.00
- Starting MRR
- $20,000.00
If that same net new repeats, each ending balance becomes the next month’s start. Example 1’s net new is $3,000 a month. Example 2’s is $1,000 a month. Starting both at $20,000:
- After 3 months at +$3,000: 20,000 + 3 × 3,000 = $29,000
- After 6 months: 20,000 + 6 × 3,000 = $38,000
- After 9 months: $47,000
- After 12 months: 20,000 + 12 × 3,000 = $56,000, and ARR on that month is 56,000 × 12 = $672,000
The doubled-churn path, at +$1,000 a month:
- After 3 months: $23,000
- After 6 months: $26,000
- After 9 months: $29,000
- After 12 months: $32,000, and ARR is 32,000 × 12 = $384,000
Fig 2 · 1/2
If the same net new repeats
Both paths start at $20,000. New, expansion, and churn stay constant.
MRR
- Net new $3,000
- Net new $1,000
| Point | Net new $3,000 | Net new $1,000 |
|---|---|---|
| Start | $20k | $20k |
| Month 3 | $29k | $23k |
| Month 6 | $38k | $26k |
| Month 9 | $47k | $29k |
| Month 12 | $56k | $32k |
Plus $3,000 a month ends the year at $56,000 MRR.
Plus $1,000 a month, the doubled-churn case, ends at $32,000.
That repeat is the formula chained. It is not a claim that new sales and churn will actually hold still for a year. The year-end gap is 56,000 − 32,000 = $24,000 of MRR, and 672,000 − 384,000 = $288,000 of ARR, from $2,000 more churn in every month.
Example 3. A heavy churn month
- Starting MRR: $20,000
- New MRR: $2,000
- Expansion MRR: $500
- Churned MRR: $6,000
Ending MRR = 20,000 + 2,000 + 500 − 6,000 = $16,500.00.
Net new MRR = 2,000 + 500 − 6,000 = −$3,500.00.
ARR = 16,500 × 12 = $198,000.00.
New and expansion brought in $2,500. Churn took $6,000. The book shrank by $3,500. ARR is $78,000 below example 1’s $276,000, because 23,000 − 16,500 = $6,500 of missing MRR, and 6,500 × 12 = $78,000.
Fig 3 · 1/3
Ending MRR on one month
Three different mixes, each run through the same formula
Ending MRR
Published
$23,000
Churn doubled
$21,000
Heavy churn
$16,500
The published month ends at $23,000.
Doubled churn ends at $21,000. Heavy churn ends at $16,500.
You can also split the ending book into what stayed, what was new, and what expanded. Retained MRR is starting minus churned.
- Published: retained 20,000 − 2,000 = $18,000, plus $4,000 new, plus $1,000 expansion.
- Churn doubled: retained $16,000, plus $4,000, plus $1,000.
- Heavy churn: retained 20,000 − 6,000 = $14,000, plus $2,000, plus $500.
Fig 4 · 1/3
What the ending month contains
Retained is starting MRR minus churned MRR
- Retained
- New
- Expansion
| Category | Retained | New | Expansion |
|---|---|---|---|
| Published | $18k | $4.0k | $1.0k |
| Churn x2 | $16k | $4.0k | $1.0k |
| Heavy churn | $14k | $2.0k | $500 |
Retained MRR is $18,000, $16,000, and $14,000.
New MRR is $4,000, $4,000, and $2,000. Expansion is $1,000, $1,000, and $500.
Example 4. New revenue that only replaces churn
- Starting MRR: $50,000
- New MRR: $1,200
- Expansion MRR: $800
- Churned MRR: $2,000
New plus expansion = 1,200 + 800 = $2,000, which equals churn.
Ending MRR = 50,000 + 2,000 − 2,000 = $50,000.00.
Net new MRR = $0.00.
ARR = 50,000 × 12 = $600,000.00.
The month looks busy. Two thousand dollars of recurring revenue arrived, and two thousand left. Ending MRR matches the start, so ARR matches 12 times the starting book too. Net new MRR is the line that says the book did not grow.
Example 5. An early book
- Starting MRR: $8,500
- New MRR: $3,200
- Expansion MRR: $900
- Churned MRR: $400
Ending MRR = 8,500 + 3,200 + 900 − 400 = $12,200.00.
Net new MRR = 3,200 + 900 − 400 = $3,700.00.
ARR = 12,200 × 12 = $146,400.00.
Net new is larger here than in example 1 ($3,700 against $3,000), on a much smaller start. The ending book is still $12,200, against example 1’s $23,000. Growth in dollars and the size of the book are both on the page. ARR reports the size. Net new reports the month.
Example 6. Expansion does the growing
- Starting MRR: $40,000
- New MRR: $1,000
- Expansion MRR: $6,000
- Churned MRR: $2,500
Ending MRR = 40,000 + 1,000 + 6,000 − 2,500 = $44,500.00.
Net new MRR = 1,000 + 6,000 − 2,500 = $4,500.00.
ARR = 44,500 × 12 = $534,000.00.
New logos added $1,000. Existing customers added $6,000. Churn removed $2,500. If you only watch the new-logo box, the month looks like $1,000 of progress. Net new is $4,500, and most of it is expansion.
Example 7. A small book
- Starting MRR: $1,200
- New MRR: $400
- Expansion MRR: $0
- Churned MRR: $80
Ending MRR = 1,200 + 400 + 0 − 80 = $1,520.00.
Net new MRR = 400 − 80 = $320.00.
ARR = 1,520 × 12 = $18,240.00.
Calculator result
Monthly recurring revenue
- Starting monthly recurring revenue
- $1,200.00
- New MRR this period
- $400.00
- Expansion MRR this period
- $0.00
- Churned MRR this period
- $80.00
$1,520.00
ending monthly recurring revenue
- Annual recurring revenue
- $18,240.00
- Net new MRR
- $320.00
- Starting MRR
- $1,200.00
The formula does not change at a small scale. $320 of net new MRR annualizes to 320 × 12 = $3,840 of ARR added on top of 1,200 × 12 = $14,400. And 14,400 + 3,840 = 18,240, which matches 12 times the ending month. That check is worth doing whenever the numbers feel abstract. ARR movement equals 12 times net new MRR, because both the start and the end get multiplied by 12.
Example 8. A one-off invoice counted as new MRR
Start at $20,000. Real new recurring revenue is $4,000. Expansion is $0. Churn is $0. A $15,000 project invoice also lands, and someone types it into new MRR.
Honest new MRR is $4,000.
Ending MRR = 20,000 + 4,000 = $24,000.00.
ARR = 24,000 × 12 = $288,000.00.
The stuffed box uses new MRR of 4,000 + 15,000 = $19,000.
Ending MRR = 20,000 + 19,000 = $39,000.00.
Net new MRR = $19,000.00.
ARR = 39,000 × 12 = $468,000.00.
The fake ARR is 468,000 − 288,000 = $180,000 higher. That gap is the one-off times 12: 15,000 × 12 = 180,000. Annualizing a non-recurring invoice multiplies it by 12. Leave it out of these boxes. It can still sit on a profit-margin page for the month it was earned.
Example 9. A year paid up front
A new customer pays $12,000 for a year. Starting MRR is $20,000. Expansion and churn are $0. The monthly slice of that contract is 12,000 ÷ 12 = $1,000.
Count the slice:
Ending MRR = 20,000 + 1,000 = $21,000.00.
ARR = 21,000 × 12 = $252,000.00.
Count the whole prepayment as this month’s new MRR:
Ending MRR = 20,000 + 12,000 = $32,000.00.
ARR = 32,000 × 12 = $384,000.00.
The gap is 384,000 − 252,000 = $132,000. The extra MRR is 12,000 − 1,000 = $11,000, and 11,000 × 12 = 132,000. You counted eleven future months twice: once inside the prepayment, and again when ARR multiplied the month by 12.
Fig 5 · 1/2
ARR if the odd cash is called MRR
Left pair is the $15,000 invoice. Right pair is the $12,000 prepay.
- Recurring slice only
- Odd cash in new MRR
| Category | Recurring slice only | Odd cash in new MRR |
|---|---|---|
| One-off invoice | $288k | $468k |
| Annual prepay | $252k | $384k |
Honest ARR is $288,000 on the invoice month and $252,000 on the prepay month.
Stuffing the odd cash into new MRR prints $468,000 and $384,000.
Example 10. Churn larger than the book
- Starting MRR: $5,000
- New MRR: $500
- Expansion MRR: $0
- Churned MRR: $7,000
Ending MRR = 5,000 + 500 + 0 − 7,000 = −$1,500.00.
Net new MRR = 500 − 7,000 = −$6,500.00.
ARR = −1,500 × 12 = −$18,000.00.
The calculator prints a negative ending MRR. A lost customer cannot take more recurring revenue than the book held, unless the starting figure is short or two periods got mixed. The formula will not stop you. A negative result is a signal to check the boxes, not a run-rate to plan on.
Ten MRR cases side by side
| Example | Start | New | Expansion | Churned | Ending MRR | Net new | ARR |
|---|---|---|---|---|---|---|---|
| 1. Published month | $20,000 | $4,000 | $1,000 | $2,000 | $23,000 | $3,000 | $276,000 |
| 2. Churn doubled | $20,000 | $4,000 | $1,000 | $4,000 | $21,000 | $1,000 | $252,000 |
| 3. Heavy churn | $20,000 | $2,000 | $500 | $6,000 | $16,500 | −$3,500 | $198,000 |
| 4. Replaced churn | $50,000 | $1,200 | $800 | $2,000 | $50,000 | $0 | $600,000 |
| 5. Early book | $8,500 | $3,200 | $900 | $400 | $12,200 | $3,700 | $146,400 |
| 6. Expansion-led | $40,000 | $1,000 | $6,000 | $2,500 | $44,500 | $4,500 | $534,000 |
| 7. Small book | $1,200 | $400 | $0 | $80 | $1,520 | $320 | $18,240 |
| 8. One-off included | $20,000 | $19,000 | $0 | $0 | $39,000 | $19,000 | $468,000 |
| 8. One-off left out | $20,000 | $4,000 | $0 | $0 | $24,000 | $4,000 | $288,000 |
| 9. Whole prepay | $20,000 | $12,000 | $0 | $0 | $32,000 | $12,000 | $384,000 |
| 9. Monthly slice | $20,000 | $1,000 | $0 | $0 | $21,000 | $1,000 | $252,000 |
| 10. Churn over the book | $5,000 | $500 | $0 | $7,000 | −$1,500 | −$6,500 | −$18,000 |
Examples 8 and 9 each have an honest row and a stuffed row. The year-repeat in example 2 is the same month applied again, so it is not a separate row here. After twelve published months the ending MRR is $56,000 and ARR is $672,000. After twelve doubled-churn months the ending MRR is $32,000 and ARR is $384,000.
Open the MRR calculator with the starting book and the new, expansion, and churned amounts for one period. The share of customers who left is the churn calculator. Cash on hand, divided by a monthly burn, is the cash runway calculator.