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ARR and MRR calculator: net new MRR, growth and retention
Monthly recurring revenue (MRR) is the subscription revenue a business can count on each month; annual recurring revenue (ARR) is that figure times twelve. The useful part is the bridge: how much came from new customers, how much existing customers added or took away.
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ARR & MRR calculator: worked example
- MRR at month end
- ₹11.5 lakh
- ARR in our example
- ₹1.38 Cr
- net revenue retention
- 100%
- MRR at month end
- ₹11.5 lakh
- ARR (MRR × 12)
- ₹138 lakh
- Net new MRR
- ₹1.5 lakh
- Net revenue retention
- 100%
The MRR bridge
Example: a company starts the month on ₹10 lakh of MRR, adds ₹1.5 lakh from new customers and ₹0.5 lakh of upgrades, and loses ₹0.2 lakh to downgrades and ₹0.3 lakh to cancellations. Net new MRR is ₹1.5 lakh, so it ends on ₹11.5 lakh: 15% growth in the month and ₹138 lakh (₹1.38 crore) of ARR.
- New MRR: subscriptions from customers who started this month.
- Expansion MRR: existing customers upgrading or adding seats.
- Contraction MRR: existing customers downgrading.
- Churned MRR: customers who cancelled.
- Net new MRR = new + expansion − contraction − churned.
Net revenue retention
Net revenue retention (NRR) looks only at customers you already had: their starting revenue plus expansion, minus contraction and churn, divided by the starting revenue. In the example, ₹10 lakh + 0.5 − 0.2 − 0.3 = ₹10 lakh, so NRR is exactly 100%: upgrades cancelled out losses, and all of the month's growth came from new customers. Above 100% means the existing base grows on its own.
What counts as recurring
Only revenue that repeats on a subscription or contract belongs in MRR. Leave out one-off set-up fees, consulting and services, and usage spikes that won't recur. Investors will rebuild your ARR from invoices in due diligence, so counting it conservatively avoids an awkward correction later.
Questions founders ask
Is ARR just MRR times 12?
For monthly subscriptions, yes: it's the current MRR annualised. Companies with annual contracts sometimes report contracted ARR instead, so say which one you mean.
Is ARR the same as revenue?
No. ARR is a run rate of recurring revenue at a point in time; revenue is what you actually earned over a period, including one-off income.
What is a good net revenue retention?
Above 100% means existing customers grow on their own. Strong business software companies often report well above that, but it varies a lot by market and customer size.
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Results are estimates for planning and learning, based only on the numbers you enter. They are not financial, tax or investment advice. All founder calculators.