Enter your paying customers and ARPU to see your MRR.
How the MRR formula works
The baseline formula is simple: MRR = paying customers x ARPU (average revenue per user per month). If you have 200 customers at an average of $30 a month, your MRR is $6,000. Multiply by 12 and you get your annual run rate (ARR): $72,000.
Averages hide detail, though. If you have multiple plan tiers or discounts, the more precise method is to sum the actual monthly value of every active subscription. A $9 starter customer and a $49 pro customer are not two "average" customers, they are $58 of MRR.
To understand whether you are growing, break the month's movement into three parts:
- New MRR: revenue from customers who signed up this month
- Expansion MRR: upgrades and add-ons from existing customers
- Churned MRR: revenue lost to cancellations and downgrades
Why MRR matters
MRR is the one number that tells you whether a subscription business is alive. It only counts predictable, recurring revenue, so it filters out one-time payments, setup fees, and lucky months. Investors and acquirers value SaaS businesses as a multiple of recurring revenue, which makes MRR (and its yearly cousin ARR) the foundation of any valuation conversation.
Net new MRR (new + expansion - churned) is the honest growth number. Total MRR can look flat while the business quietly swaps healthy long-term customers for discounted short-term ones. Watching the three components separately shows you whether growth is coming from real demand, from squeezing existing customers, or from nowhere.
Benchmarks, honestly
Benchmarks vary wildly by market, price point, and how the product is sold, so treat any single number with suspicion. That said, some commonly cited reference points for early-stage, self-serve SaaS: solo founders often consider $5K to $20K MRR a strong outcome for a micro SaaS, and 10 to 20 percent month over month growth is generally considered fast at a small base.
The more useful benchmark is your own last three months. If net new MRR is positive and the growth rate is not shrinking month after month, the engine works. If churned MRR regularly eats most of your new MRR, fix retention before spending anything on acquisition.
Frequently asked questions
What is the formula for MRR?
MRR equals the number of paying customers multiplied by average revenue per user per month. For more precision, add up the actual monthly value of each active subscription instead of using the average, which accounts for different plan tiers and discounts.
What is the difference between MRR and ARR?
ARR is simply MRR multiplied by 12. MRR is the standard measure for early-stage products because things change month to month. ARR is more common once a business sells annual contracts or talks to investors and acquirers.
Does MRR include one-time payments?
No. MRR only counts recurring subscription revenue normalized to a monthly amount. One-time payments, setup fees, usage overages, and services revenue are excluded. That is exactly what makes MRR useful: it is the revenue you can reasonably count on next month.
What is net new MRR?
Net new MRR is new MRR plus expansion MRR minus churned MRR. It is the honest measure of monthly growth because it shows whether new and expanding revenue outpaces what you lose to cancellations and downgrades.
Is this MRR calculator really free?
Yes. It runs entirely in your browser, there is no signup, and the numbers you type never leave your machine. IdeaFast makes money from its research product, not from tools like this one.
More free tools
Know your numbers. Now validate what to build next.
Calculators tell you how the business is doing. IdeaFast tells you what to build: real pain points from Reddit, scored and backed by the original threads. Your first scan is free.