Net New MRR = New MRR (new customers) + Expansion MRR (upsells) − Churned MRR (cancellations) − Contraction MRR (downgrades). A positive Net New MRR means the business is growing. Negative means you're shrinking.

ARR (Annual Recurring Revenue) = MRR × 12. It is the annualized view of recurring revenue, commonly used for reporting, valuation (ARR multiples), and fundraising conversations. $1M ARR is a common early milestone for B2B SaaS.

What MRR growth rate should I target?

Top-tier early-stage SaaS grows 10–20% month-over-month. At scale ($1M ARR+), 3–5% monthly (40–80% annually) is strong. The T2D3 benchmark (triple, triple, double, double, double) suggests tripling ARR in years 1 and 2, then doubling in years 3–5.

What is the Rule of 40?

The Rule of 40 states that a healthy SaaS company's revenue growth rate + profit margin should equal or exceed 40. A company growing at 30% with a 10% profit margin scores 40. It balances growth and profitability for mature SaaS businesses.

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Free MRR Growth Simulator — 24-Month SaaS Revenue Forecast

MRR (Monthly Recurring Revenue) growth is driven by new MRR (new customers), expansion MRR (upsells), and offset by churned MRR and contraction MRR. Net New MRR = New + Expansion − Churned − Contraction. This simulator projects 24 months of MRR growth with a month-by-month table and visual chart.

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How It Works

How to use MRR Growth Simulator

Enter starting MRR

Input your current MRR at the start of the simulation.

Set growth inputs

Enter monthly new MRR added, expansion rate (% of existing MRR from upsells), and monthly churn rate.

See 24-month projection

View the month-by-month table and chart showing MRR, ARR, and cumulative revenue.

FAQ

Frequently asked questions

MRR (Monthly Recurring Revenue) is the predictable, normalized monthly revenue from all active subscriptions. It is calculated as: number of customers × average billed amount per month. It excludes one-time payments and non-recurring charges.

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References

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Free MRR Growth Simulator — 24-Month SaaS Revenue Forecast

How to use MRR Growth Simulator

Frequently asked questions

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