# Monthly Recurring Revenue (MRR) > The predictable subscription revenue you can count on every month, and how fast it grows. - Type: Calculator: Predictable revenue you collect each month - Tags: Metrics, Retention - Growth levers: Revenue (primary), also Retention - ~1073 words --- **MRR Calculator.** Net new MRR this month and your month-over-month growth. Inputs: New MRR, Expansion MRR, Churned MRR, MRR at start of month. Outputs: MoM MRR growth, Net new MRR. Monthly Recurring Revenue (MRR) is the predictable subscription revenue your business collects every month, normalised to a monthly figure. It's the heartbeat of any subscription company: the number that tells you whether growth is real and compounding, or just a one-off spike that won't repeat next month. > **Formula:** Net new MRR = new MRR + expansion MRR - churned MRR. Month-over-month MRR growth = net new MRR / MRR at the start of the month x 100. Normalise any annual or quarterly contracts to their monthly value before you add them in. ## How MRR is calculated Worked example: you start the month at $200,000 MRR. You add $18,000 in new MRR from fresh signups, $6,000 in expansion MRR from upgrades and seat additions, and you lose $4,000 to cancellations and downgrades. Net new MRR is 18,000 + 6,000 - 4,000 = **$20,000**, which is 20,000 / 200,000 x 100 = **10% month-over-month growth**. That's the exact pair the calculator above returns for those four inputs. The dollar figure is the headline, but the growth rate is what investors and your own dashboard live by. A bigger company can post a small MRR percentage and still add far more dollars than a startup posting a huge one, so judge MRR against your own stage. The four-part split is the part most people skip: blend new, expansion and churned MRR into one number and you lose sight of which lever is actually working. ## The four components of MRR Every monthly MRR move comes from four sources, and a healthy business tracks them separately. New MRR is revenue from customers who signed up this month. Expansion MRR is the extra revenue from existing customers who upgraded, added seats, or crossed a usage tier. Churned MRR is revenue lost to cancellations. Contraction MRR is revenue lost to downgrades that stop short of a full cancel, and it usually gets folded into the churned figure for the headline number. When expansion MRR outruns churned MRR, your existing base grows even before a single new customer signs up. That's net negative churn, and it's the cleanest signal that the product is worth more to customers over time. You can pressure-test it with the [expansion revenue calculator](https://www.productgrowth.blog/calculators/expansion-revenue) and watch how [churn](https://www.productgrowth.blog/calculators/churn-rate) eats into the same line from the other side. ## What is a good MRR growth rate? A good MRR growth rate depends almost entirely on your stage and category. The [2025 SaaS Benchmarks report from Kyle Poyar and High Alpha](https://www.growthunhinged.com/p/2025-saas-benchmarks-report?utm_source=productgrowth.blog) puts traditional B2B SaaS in the $1M to $5M ARR band near 40% year-over-year, which works out to roughly 2.8% a month, while AI-native startups at the same stage run 110% YoY, closer to 6.4% a month. [SaaS Capital's 2025 survey](https://www.saas-capital.com/research/?utm_source=productgrowth.blog) pegs the median private SaaS company at about 25 to 30% YoY, or roughly 2% MoM. The rule of thumb still holds for early-stage companies: 10 to 15% month-over-month is hypergrowth, 2 to 4% is solid, and flat means something is leaking. ## MRR growth benchmarks by industry | Industry | Median | Good | Great | | --- | --- | --- | --- | | SaaS | 2.5% | 4.0% | 6.0% | | Fintech | 2.5% | 4.0% | 6.5% | | Dev Tools | 2.5% | 4.0% | 7.0% | | AI/ML | 5.5% | 7.0% | 10.0% | | E-commerce | 1.5% | 3.0% | 5.0% | | Healthtech | 2.0% | 3.5% | 6.0% | | Martech | 1.5% | 2.5% | 4.0% | *MoM MRR growth (%) · MoM bands derived from YoY growth: High Alpha/Kyle Poyar 2025 SaaS Benchmarks (AI-native vs traditional by ARR stage); SaaS Capital 2025 survey (median ~25-30% YoY); Lighter Capital 2025 B2B SaaS Benchmarks (28% median); Stripe/Tidemark 2025 Vertical SaaS (31% median, fintech); Bessemer State of Health Tech 2024; ChartMogul SaaS Benchmarks.* These bands convert each category's typical year-over-year growth into a monthly rate for a company in the $1M to $20M ARR range, where MoM MRR growth is the operating KPI. AI/ML sits highest because High Alpha's data shows AI-native companies growing roughly 3x faster than traditional SaaS at every stage. [Stripe and Tidemark's 2025 vertical SaaS work](https://stripe.com/lp/vertical-saas-benchmark-2025?utm_source=productgrowth.blog) puts fintech-led vertical SaaS at a 31% median, a notch above horizontal peers, on the back of 96% gross retention. Martech lands lowest: with more than 15,000 tools fighting over a saturated category, most growth now comes from displacement rather than net-new demand. Read your own row, not the global average, and treat the 'good' column as the line you should clear before pouring money into acquisition. ## How to grow MRR - **Plug the churn leak first.** Every dollar of churned MRR is a dollar new sales has to win back before you grow. Cutting monthly revenue churn from 4% to 2% does more for your growth rate than most acquisition campaigns. - **Build an expansion path.** Usage tiers, seat-based pricing, and add-ons let accounts grow with their own success. Dev-tools companies like Datadog post net revenue retention above 120% precisely because the bill scales with usage. - **Shift toward annual plans where it fits.** Annual contracts cut involuntary churn and lock in revenue, though you'll normalise them back to a monthly figure for this calculation. - **Watch net new MRR, not just the total.** A growing total can hide a shrinking net new figure once your base gets large. The growth rate is the early-warning light. ## Related calculators Multiply this month's MRR by twelve with the [ARR calculator](https://www.productgrowth.blog/calculators/annual-recurring-revenue-arr) to see the annual run-rate investors quote. Break revenue down per customer with the [revenue per user calculator](https://www.productgrowth.blog/calculators/revenue-per-user-rpu), and trace how long that revenue sticks around with the [lifetime value calculator](https://www.productgrowth.blog/calculators/customer-lifetime-value-ltv). #### What is a good monthly recurring revenue MRR? There's no single 'good' MRR dollar figure, because what matters is the growth rate relative to your stage. For early-stage SaaS, 10 to 15% month-over-month MRR growth is hypergrowth, 2 to 4% is solid, and flat is a warning sign. By industry, AI/ML companies run highest at 5 to 10% MoM, while saturated categories like martech sit closer to 1.5 to 4%, per the 2025 SaaS Benchmarks report and SaaS Capital. #### How is MRR calculated? MRR is the sum of all your recurring monthly subscription revenue, normalised to a monthly value. Net new MRR for a given month is new MRR plus expansion MRR minus churned MRR. If you start a month at $200,000 and add $18,000 new, $6,000 expansion, and lose $4,000 to churn, your net new MRR is $20,000 and your month-over-month growth is 10%. #### What is the difference between MRR and ARR? MRR is revenue normalised to a single month; ARR is the annual run-rate, usually MRR times twelve. MRR is the better operating number for month-to-month decisions because it reacts faster to new signups, upgrades, and churn. ARR is the figure investors and boards quote because it smooths out monthly noise into one annual headline. #### Should I include one-time fees in MRR? No. MRR counts only recurring subscription revenue. One-time setup fees, professional services, and usage overages that don't repeat predictably stay out of the MRR figure, otherwise you'll overstate predictable revenue and miscount your growth rate. Annual contracts do count, but you divide them by twelve to get their monthly value first. --- All posts: https://www.productgrowth.blog/archive · Site: https://www.productgrowth.blog