MRR Calculator

Calculate Your Monthly Recurring Revenue

Free tool for SaaS founders and indie hackers to calculate MRR, ARR, and key subscription metrics. Track your revenue across multiple pricing tiers and understand your business growth.

Your Pricing Tiers

Enter your pricing tiers and customer counts to calculate your MRR.

Monthly Recurring Revenue
$0.00
Your total MRR across all tiers
Annual Recurring Revenue
$0.00
Your projected ARR (MRR × 12)
Total Customers
0
Across all pricing tiers
Avg Revenue Per User
$0.00
Average MRR per customer

Understanding MRR Metrics

What is MRR (Monthly Recurring Revenue)?

MRR is the predictable revenue your business generates every month from subscriptions. It's calculated by multiplying your total number of paying customers by the average revenue per customer per month.

Why is MRR Important?

MRR is the most critical metric for SaaS and subscription businesses. It helps you:

  • Forecast future revenue and plan growth
  • Measure business health and momentum
  • Make informed decisions about hiring and spending
  • Communicate progress to investors and stakeholders

MRR vs ARR

ARR (Annual Recurring Revenue) is simply your MRR multiplied by 12. While MRR is better for tracking month-to-month growth, ARR is often used when discussing business valuations and larger strategic planning.

Tips for Growing MRR

  • Reduce churn by improving product value and customer support
  • Implement pricing tiers to capture different customer segments
  • Focus on expansion revenue through upsells and cross-sells
  • Acquire new customers through sustainable marketing channels

How to Calculate MRR (Monthly Recurring Revenue)

Monthly Recurring Revenue (MRR) is the lifeblood metric for any SaaS business or subscription-based company. It represents the predictable and recurring revenue components of your subscription business.

MRR Calculation Formula

The basic MRR formula is:

MRR = Total Number of Customers × Average Revenue Per Customer

For businesses with multiple pricing tiers (like most SaaS companies), the formula expands to:

MRR = Σ (Customers in Tier × Price of Tier)

Types of MRR You Should Track

  • New MRR: Revenue from newly acquired customers
  • Expansion MRR: Additional revenue from existing customers through upsells or add-ons
  • Churned MRR: Lost revenue from cancelled subscriptions
  • Contraction MRR: Lost revenue from downgrades
  • Net New MRR: (New + Expansion) - (Churned + Contraction)

Why MRR Matters for Your SaaS Business

MRR is essential for several reasons:

  • Predictable Revenue: Unlike one-time sales, MRR helps you forecast future income
  • Growth Tracking: Monitor month-over-month growth trends
  • Business Valuation: Investors often value SaaS businesses at 5-10x ARR
  • Decision Making: Make informed decisions about hiring, marketing spend, and product development

MRR Best Practices for Indie Hackers

  1. Track MRR consistently: Calculate it at the same time each month for accurate trends
  2. Exclude one-time fees: Only count recurring subscription revenue
  3. Normalize annual plans: Divide annual contracts by 12 to get monthly equivalent
  4. Monitor churn rate: Keep it below 5-7% monthly for healthy growth
  5. Focus on Net MRR: Growth isn't just about new customers, but keeping existing ones

Common MRR Mistakes to Avoid

  • Including one-time setup fees or professional services revenue
  • Counting free trial users who haven't converted to paid
  • Not accounting for discounts or promotional pricing
  • Forgetting to subtract refunds and failed payments
  • Mixing cash received with recognized revenue (use accrual accounting)

From MRR to ARR: Understanding Annual Recurring Revenue

ARR (Annual Recurring Revenue) is simply your MRR multiplied by 12. While both metrics measure recurring revenue, ARR is typically used for:

  • Companies with annual contracts
  • Businesses with ARR over $1M
  • Long-term strategic planning
  • Investor communications and valuations

Early-stage startups and indie hackers typically focus on MRR because it's more actionable for tracking month-to-month growth and making quick adjustments to strategy.

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Frequently Asked Questions

What is a good MRR growth rate?

For early-stage SaaS companies, aim for 10-20% month-over-month MRR growth. As you scale, 5-10% monthly growth is considered strong. The key is consistent, sustainable growth rather than explosive but unsustainable spikes.

How do I calculate MRR with annual plans?

Divide the annual contract value by 12 to get the monthly equivalent. For example, a customer paying $1,200/year contributes $100 to your MRR. This normalization helps you compare growth across different billing frequencies.

What's the difference between MRR and revenue?

MRR only includes recurring subscription revenue, while total revenue includes one-time fees, professional services, and other non-recurring income. MRR gives a clearer picture of your subscription business health and predictability.

How is MRR used in SaaS valuations?

Investors typically value SaaS companies at a multiple of ARR (Annual Recurring Revenue). Common multiples range from 5-10x ARR for established companies, though high-growth startups can command higher multiples. Your MRR × 12 gives you ARR for valuation purposes.