Understanding your SaaS metrics results
Each metric answers a different question about the health of recurring revenue, and SaaS metrics frameworks generally recommend tracking them together rather than relying on any single figure.
| Metric | What it tells you |
|---|---|
| MRR | Current predictable monthly subscription revenue. |
| ARR | MRR annualized — the figure most commonly used to describe overall SaaS company size. |
| Net new MRR | The net change in recurring revenue this period from new, expansion, and churned MRR combined. |
| NRR | How existing-customer revenue alone changed this period, excluding new customer acquisition — a widely tracked indicator of product stickiness and expansion. |
- NRR above 100% indicates expansion revenue outpaced churned revenue from the existing customer base; NRR below 100% indicates the opposite, even if the company is still growing overall due to new customer acquisition.
- This calculator computes MRR from an average ARPU across all customers; a business with widely varying customer sizes may find more insight in tracking MRR by customer segment or cohort.
What are MRR, ARR, and NRR?
Monthly recurring revenue (MRR) is the predictable subscription revenue a business collects each month, calculated as total customers multiplied by average revenue per customer (ARPU). Annual recurring revenue (ARR) is simply MRR annualized (MRR × 12), and is the figure most commonly used to describe SaaS company size and to compare growth rates year over year.
Net new MRR captures the change in recurring revenue during a period from three components: new MRR (revenue from newly acquired customers), expansion MRR (additional revenue from existing customers upgrading or buying more), and churned MRR (revenue lost from customers who canceled or downgraded). These components are the standard building blocks described in SaaS metrics frameworks such as David Skok's SaaS Metrics 2.0.
Net revenue retention (NRR) measures how existing revenue changes over a period from expansion and churn alone, excluding new customers — it answers the question 'if we stopped acquiring new customers today, would our revenue from existing customers grow or shrink?' An NRR above 100% means expansion revenue from existing customers more than offsets churned revenue, a metric widely tracked by public and private SaaS companies as a sign of a strong product.
How to use this SaaS metrics calculator
- Enter your total number of paying customers.
- Enter average monthly revenue per customer (ARPU).
- Enter new MRR added from new customers during the period.
- Enter churned MRR lost from customers who canceled or downgraded during the period.
- Enter expansion MRR gained from existing customers who upgraded or purchased more during the period.
- Read MRR, ARR, net new MRR, and net revenue retention (NRR).
The formula behind MRR, ARR, and NRR
MRR is total customers multiplied by ARPU. For example, 500 customers at $99 average monthly revenue gives MRR of 500 × $99 = $49,500, and ARR is $49,500 × 12 = $594,000.
Net new MRR sums new MRR and expansion MRR, then subtracts churned MRR. With $3,000 new MRR, $800 expansion MRR, and $1,200 churned MRR, net new MRR is $3,000 + $800 − $1,200 = $2,600.
NRR takes the starting MRR, adds expansion MRR, subtracts churned MRR (deliberately excluding new MRR from new customers), and divides by the starting MRR: ($49,500 + $800 − $1,200) ÷ $49,500 ≈ 99.2%.
Common mistakes
- Including new MRR in the NRR calculation — NRR is specifically designed to isolate existing-customer revenue change and deliberately excludes new customer acquisition.
- Confusing NRR with gross revenue retention (GRR) — GRR excludes expansion revenue and only measures the negative effect of churn and downgrades, so it is always lower than or equal to NRR.
- Using a period-end customer count that doesn't match the period the new/churned/expansion MRR figures were measured over, which produces an inconsistent MRR baseline.
- Treating ARR as if it were guaranteed future revenue — ARR is simply an annualized snapshot of current MRR and does not account for contracts, churn, or future changes.
Câu hỏi thường gặp
What is the difference between MRR and ARR?
MRR (monthly recurring revenue) is predictable subscription revenue collected each month; ARR (annual recurring revenue) is simply MRR multiplied by 12. ARR is more commonly used to describe overall company size, while MRR is used for month-to-month tracking of recurring revenue trends.
What is net revenue retention (NRR) and why does it matter?
Net revenue retention measures how revenue from existing customers changes over a period due to expansion (upgrades) and churn, deliberately excluding new customer acquisition. An NRR above 100% means expansion revenue more than offset churned revenue from the existing base — a pattern widely regarded in SaaS metrics frameworks as a strong indicator of product value and stickiness.
What is a good NRR for a SaaS company?
NRR benchmarks vary by company size, market segment, and pricing model; publicly reported figures from established SaaS companies and industry surveys (such as those published by Bessemer Venture Partners) provide useful comparison points, but there is no single universal target. NRR above 100% is generally viewed favorably since it indicates existing customers are, on net, expanding rather than shrinking.
How is net new MRR different from NRR?
Net new MRR combines new customer MRR, expansion MRR, and churned MRR into one figure describing the total change in recurring revenue for the period. NRR deliberately excludes new customer MRR to isolate how existing-customer revenue alone is trending — the two metrics answer related but different questions.
Tài liệu tham khảo
- Skok D. SaaS Metrics 2.0 — A Guide to Measuring and Improving What Matters. forEntrepreneurs.com.
- Bessemer Venture Partners. State of the Cloud / Cloud Index — SaaS benchmark metrics. bvp.com.
- Kotler P, Keller KL. Marketing Management. 15th ed. Pearson, 2016.