What MRR is and how to calculate it
MRR is the sum of all recurring revenue normalized to a monthly figure. Annual subscriptions are divided by 12. The basic formula is active paying customers multiplied by average revenue per account.
- MRR = active customers x average monthly revenue per account
- Annual plans count as annual value / 12
- Exclude one-off revenue such as setup fees or services
MRR vs ARR: which one to use
MRR is better for tracking month-to-month momentum and growth velocity. ARR (MRR x 12) is what investors, annual targets, and cross-company benchmarks are usually quoted in.
- ARR = MRR x 12
- Use MRR for monthly momentum
- Use ARR for targets, valuation, and benchmarking
Why the projection needs churn, not just growth
Growing 10% a month with 5% churn is a very different business from growing 10% a month and losing nobody. The projection shows how churn eats into compounding growth over a full year.
- High churn caps compound growth
- Small retention gains move year-end ARR a lot
- Compare scenarios before you spend on acquisition
See it in real data
Mobile apps
Estimated revenue and downloads from the App Store and Google Play
Frequently asked questions
What is MRR?
MRR (Monthly Recurring Revenue) is the recurring revenue your SaaS generates each month. Add up the monthly value of every active subscription, dividing annual plans by 12.
How do you calculate MRR?
Multiply your active paying customers by the average monthly revenue per account. For example, 100 customers paying $50/month gives you $5,000 in MRR.
What is the difference between MRR and ARR?
MRR is monthly recurring revenue and ARR (Annual Recurring Revenue) is the annualized figure, equal to MRR x 12.
Is this MRR calculator free?
Yes. Noctral's MRR and ARR calculator is completely free and requires no signup.