MRR calculator: MRR, ARR and growth

What is MRR (monthly recurring revenue)?

Monthly recurring revenue is the predictable subscription revenue you can expect every month, normalized to a monthly amount. It’s the headline metric for subscription businesses because it strips out timing noise — an annual plan paid in January counts as one-twelfth each month rather than a spike — and shows the run rate of the business.

ARR (annual recurring revenue) is the same thing on a yearly scale: MRR × 12. Early-stage and self-serve products usually report MRR; companies selling annual contracts usually report ARR.

MRR and ARR formulas

Worked example

1. A SaaS has 120 paying customers averaging $49 a month: MRR = 120 × $49 = $5,880; ARR = $70,560.
2. If MRR grows 8% a month, after 12 months it’s $5,880 × 1.08¹² ≈ $14,807 — ARR of about $177,700.
3. To reach $20,000 MRR at that pace: ln(20,000 ÷ 5,880) ÷ ln(1.08) ≈ 15.9, so 16 months.
4. One month’s bridge: starting MRR $20,000, + $2,400 new, + $800 expansion, − $300 contraction, − $900 churned = $22,000. Net new MRR is $2,000, or 10% growth.

Monthly and annual growth rates are easy to confuse because of compounding. This table converts between them:

What is a good MRR growth rate? Benchmarks

• ChartMogul’s SaaS Growth Report (2023), based on 2,200+ SaaS businesses: “The median SaaS business grows around 2–2.5% per month throughout its lifecycle,” and the top decile of companies with $1–3M ARR grew 192% a year.
• T2D3 — “triple, triple, double, double, double” — is the annual growth path Neeraj Agrawal of Battery Ventures described in 2015 for venture-backed SaaS companies heading to a billion-dollar valuation. It’s an aspiration for a small minority, not a norm.
• Early on, percentages are noisy: going from $1,000 to $1,500 MRR is 50% growth from a handful of customers. Watch absolute net new MRR as well.

Common MRR mistakes

• Counting annual payments in full. A $1,200 annual plan is $100 MRR, not $1,200 in the month it’s paid.
• Including one-off revenue. Setup fees, consulting and one-time purchases aren’t recurring, even if they arrive monthly for a while.
• Counting trials or unpaid invoices. A trial becomes MRR when it converts; a failed payment that isn’t recovered is churn.
• Ignoring discounts. A $49 plan with a 50% coupon contributes $24.50 MRR while the coupon lasts.
• Projecting this month’s growth rate forever. Growth rates almost always decline as MRR grows; treat a 12-month compounding projection as a scenario, not a forecast.
• Reporting only total MRR. Without the new / expansion / contraction / churn split you can’t tell whether growth comes from acquisition or retention.

How VisitTrack connects MRR to its sources

Your billing tool (Stripe, Paddle, Polar, Lemon Squeezy, Razorpay) is the source of truth for MRR itself. What it can’t tell you is where new MRR came from. VisitTrack attributes each payment to the visit that earned it, so you can see which referrers, campaigns and landing pages add the most new revenue.

1. Connect your payment provider with revenue attribution — webhooks report each payment, attributed to the visitor’s source.
2. Open the Revenue tab for revenue over time and by source, campaign, country and device; refunds are shown separately.
3. Track signups too (custom events) so you see the whole path: visitors → signups → payments.
4. Work backwards from an MRR goal to the traffic it needs with the traffic to revenue calculator.