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.

What is expansion MRR and why does it matter?

Expansion MRR is revenue added from existing customers through upsells, seat additions, plan upgrades, or usage increases — without acquiring new customers. When expansion MRR exceeds churned MRR, the business has negative net revenue churn, meaning it grows even with zero new sales. Expansion is the most capital-efficient form of growth and a key driver of elite SaaS unit economics.

Is my data sent to a server?

No. The MRR projection runs entirely in your browser with JavaScript. No revenue figures, growth rates, or business data are uploaded, logged, or stored anywhere. You can model sensitive financial scenarios without any privacy concern.

saas

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.

Free — No SignupRuns in BrowserData Never Uploaded

saas

Simulate 24-month MRR growth with new MRR, expansion, and churn inputs.

24-month MRR projection with month-by-month breakdown
New, expansion, churned, and net new MRR separated each month
ARR (annualized run-rate) and cumulative revenue alongside MRR
Optional monthly growth in new MRR to model sales team ramp
Visual MRR growth chart showing shape — accelerating, linear, or flattening
Client-side only — no revenue figures are uploaded or stored

Features

Everything you need in one MRR Growth Simulator

24-month MRR projection

Projects recurring revenue forward two years, so you can see whether your current inputs compound into real growth or stall.

Net new MRR breakdown

Separates new, expansion, and churned MRR each month — the components every SaaS board deck reports — so you see what drives the line.

ARR & cumulative revenue

Annualizes MRR into ARR and sums total revenue collected over the period, the headline numbers for planning and fundraising.

Visual growth chart

Plots the MRR curve so the shape of growth — accelerating, linear, or flattening — is obvious at a glance.

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.

Format Comparison

MRR movement terms

Term	Meaning
New MRR	Recurring revenue from newly acquired customers
Expansion MRR	Added revenue from existing customers — upsells, seats, upgrades
Churned MRR	Revenue lost when customers cancel
Contraction MRR	Revenue lost when customers downgrade but stay
Net New MRR	New + Expansion − Churned − Contraction
ARR	MRR × 12 — the annual recurring run-rate

Troubleshooting

How to fix common syntax errors

Most “invalid JSON” failures come from a small set of mistakes. Paste the failing JSON above, click Validate, and the tool points you at the exact line and column.

Including one-time setup or implementation fees in MRRMRR = subscription revenue + $5,000 onboarding fee

MRR includes only predictable, recurring subscription revenue. One-time fees — setup, implementation, training, professional services — are excluded. Including them inflates MRR, distorts growth rates, and misrepresents the health of the recurring business.

Using total revenue instead of recurring subscription revenueMRR = total monthly invoice amount (includes usage overages)

Normalize to the contracted recurring component only. Usage-based overages are not fully predictable — they may be included if they recur consistently, but one-time spikes should be excluded. The goal is predictability, not maximizing the number.

Forgetting contraction MRR in the net new MRR formulaNet New MRR = New + Expansion − Churned

Contraction MRR — revenue lost when customers downgrade to a cheaper plan — must also be subtracted: Net New MRR = New + Expansion − Churned − Contraction. Omitting contraction overstates growth, especially in products with usage-based or tiered plans.

Treating ARR as the sum of monthly revenue collectedARR = sum of all 12 months of MRR (different each month)

ARR is the run-rate annualization of current MRR: ARR = current MRR × 12. It is not the total revenue collected over the past year. Collecting $800K last year while current MRR is $100K gives ARR = $1.2M — the forward-looking rate, not the historical total.

Counting annual contract bookings as immediate full MRRAnnual $120,000 contract signed → MRR jumps by $120,000

MRR recognizes recurring revenue monthly: a $120,000 annual contract adds $10,000 to MRR per month. Booking the full contract value in month 1 inflates MRR and distorts the recurring revenue model. Recognize it ratably over the contract period.

Double-counting reactivated customers as both new MRR and churned recoveryChurned customer reactivates — added to new MRR AND subtracted from churned MRR

Reactivations should be tracked as a separate category (reactivation MRR) or as new MRR — but not both. Subtracting them from churned MRR retroactively overstates retention and hides the true churn impact from stakeholders.

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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