b2KIT

MRR / ARR Calculator

Calculate monthly and annual recurring revenue with new, expansion, contraction, and churned MRR components and growth trends.

Tested tool guide Tested browser tools Checked August 16, 2026

What MRR / ARR Calculator does, with a checked example

Recurring revenue changes through four distinct movements: new subscriptions, upgrades, downgrades, and cancellations. The calculator starts with opening MRR, adds new and expansion MRR, subtracts contraction and churned MRR, then annualizes the resulting ending MRR to show ARR and net growth. The common surprise is that ARR is an annualized run rate. It is not revenue already earned, and it does not predict future seasonality, pricing changes, contraction, or churn.

Worked example

A concrete input and expected output from the current implementation.

Input

Starting MRR: $10,000
New MRR: $1,000
Expansion MRR: $500
Contraction MRR: $200
Churned MRR: $300

Expected output

Net new MRR: $1,000
Ending MRR: $11,000
ARR: $132,000
MRR growth: 10%

The positive movements total $1,500 and the reductions total $500, producing a $1,000 net increase. Ending MRR is therefore $11,000, ARR is $11,000 multiplied by 12, and growth is $1,000 divided by the $10,000 starting MRR.

How the result is produced

1

MRR bridge

The revenue bridge is starting MRR plus new MRR plus expansion MRR, minus contraction MRR and churned MRR. Enter contraction and churn as positive reduction amounts rather than negative numbers. New MRR represents recurring revenue from newly acquired customers, while expansion represents additional recurring revenue from customers already present at the start of the period.

2

Annualization and growth

ARR is calculated by multiplying ending MRR by 12. Net new MRR is the combined increase after both recurring-revenue losses are deducted. The period's MRR growth percentage compares that net change with starting MRR. If starting MRR is zero, a percentage growth rate is mathematically undefined even though ending MRR and ARR can still be calculated.

Good uses

  • Reconcile a monthly SaaS revenue bridge before presenting new, expansion, contraction, and churn movements to management.
  • Convert the latest ending MRR into an annualized run rate for a board update or operating dashboard.
  • Compare monthly growth after separating customer acquisition and upgrades from downgrades and complete cancellations.

Limits and checks

  • Include only recurring charges measured on a consistent monthly basis. Setup fees, professional services, hardware sales, and other one-time amounts can overstate both MRR and ARR.
  • ARR assumes the ending monthly run rate continued for 12 months. It is not a cash forecast, contracted backlog, invoice total, or accounting measure of revenue recognized during the coming year.
  • Results depend on consistent classification. A partial downgrade belongs in contraction, while the loss of the customer's entire recurring amount belongs in churn. Mixing definitions makes comparisons between periods unreliable.

Common questions

What is the difference between new MRR and expansion MRR?

New MRR comes from customers who were not contributing recurring revenue at the beginning of the period. Expansion MRR is an increase from an existing customer, such as an upgrade, added seats, or a higher recurring plan. A reactivated former customer can be classified differently across businesses, so apply the same written convention each month.

Does the calculated ARR equal the revenue the business will recognize next year?

No. ARR simply annualizes the ending monthly recurring run rate by multiplying it by 12. Actual recognized revenue can differ because customers may join, cancel, upgrade, or downgrade, and because billing schedules and accounting recognition rules do not necessarily follow the MRR run-rate calculation.

References and verification

The example and behavioral notes were checked against the browser implementation. Standards and primary references below define the relevant format, formula, or platform behavior.

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