MRR and Churn Calculator
MRR and Churn Calculator
Monthly recurring revenue month by month from your customers today, new sign-ups, churn and expansion — with ARR, net revenue retention and the customer count that churn caps you at.
MRR projection
200 customers at $2,000 a month, 25 new a month, 3% monthly churn, 1% net expansion, 24 months
MRR with churn, expansion and new customers
- n
- new customers a month
- p
- the share of an existing customer base’s MRR kept each month after churn and expansion
- NRR
- net revenue retention over 12 months: p12, the MRR today’s customers bring a year from now as a % of today’s
Worked example
200 customers at $2,000 a month, 25 new a month, 3% monthly churn, 1% net expansion, 24 months
MRR today = 200 × 2,000 = $4,00,000; p = 0.97 × 1.01 = 0.9797
Today's customers after 24 months: 4,00,000 × 0.979724 = $2,44,509
New customers: 25 × 2,000 × (1 − 0.979724) ÷ (1 − 0.9797) = $9,57,458
MRR after 24 months = $12,01,967; ARR $1,44,23,600; 528 customers
NRR over 12 months = 0.979712 = 78.2%; customers level off near 25 ÷ 0.03 = 833
The example at other churn rates, after 24 months
| Monthly churn | Customers | MRR | 12-month NRR | Steady-state customers |
|---|---|---|---|---|
| 1% | 693 | $15,97,662 | 99.9% | 2,500 |
| 2% | 603 | $13,81,978 | 88.4% | 1,250 |
| 3% | 528 | $12,01,967 | 78.2% | 833 |
| 5% | 412 | $9,25,153 | 60.9% | 500 |
| 8% | 297 | $6,53,656 | 41.4% | 312 |
Churn sets a ceiling on growth
Monthly recurring revenue (MRR) is the subscription revenue you can expect every month: paying customers × average revenue per customer. It moves for four reasons — new customers, customers who leave (churn), customers who upgrade (expansion) and customers who downgrade (contraction). The page nets the last two into one expansion rate and projects each month in turn; ARR is simply MRR × 12.
The most useful number here is often the steady state. If you win n customers a month and lose a share c of them, the base stops growing when the losses equal the wins, at n ÷ c customers. In the example, 25 new customers a month against 3% churn levels off near 833 customers however long you wait — to grow past that you have to win more customers or lose fewer. Halving churn doubles the ceiling, which is why subscription businesses watch churn so closely.
Net revenue retention (NRR) asks what this year’s customers will pay a year from now, counting churn, downgrades and upgrades, as a % of what they pay today. With 3% churn and 1% expansion a month it is 78.2%. Above 100% — David Skok’s “negative churn” — the existing base grows on its own. Definitions vary between companies (some measure it on a single cohort, some on the whole base, some annually), so compare like with like.
The projection holds every rate steady and applies churn evenly; real churn is usually higher in a customer’s first months and lower later, and new customers may not pay today’s average. Treat it as a model of the trend, not a forecast. For what each customer is worth against the cost of winning them, see the LTV and CAC calculator; for how long the cash lasts while MRR grows, the burn rate and runway calculator. This is arithmetic on the figures you enter, not financial advice.
Frequently asked questions
How do you calculate MRR?
Paying customers × average monthly revenue per customer. 200 × 2,000 = $4,00,000. ARR is MRR × 12.
What is net revenue retention?
Revenue from today’s customers a year from now, after churn, downgrades and upgrades, as a % of today’s. With 3% monthly churn and 1% expansion it is 78.2%.
Why does my customer count stop growing?
Because churn scales with the base while new sign-ups do not. The count levels off at new customers ÷ churn rate: 25 ÷ 3% = 833.
What is negative churn?
When expansion from existing customers is larger than the revenue lost to churn, so revenue from the existing base grows. It shows here as an NRR above 100%.
Related calculators
References
- Skok D. SaaS Metrics 2.0 — A Guide to Measuring and Improving What Matters. forEntrepreneurs.com, first published 4 July 2014, last modified 21 December 2020: monthly recurring revenue, customer and MRR churn, expansion revenue and “negative churn”, where expansion from existing customers outweighs the revenue lost to churn.