Accounting Monthly Recurring Revenue (Annual) Calculator Examples
Worked subscription revenue examples showing how new MRR, expansion, contraction, and churn affect ending MRR and annual recurring revenue.
These scenarios show how to turn a monthly MRR movement report into an annualized ARR estimate. Each result uses ending MRR as the run rate and keeps new-customer growth separate from retention of the opening customer base.
Example 1: Early-stage subscription business growth
The business starts with $10,000 in MRR, adds $1,500 in new MRR and $500 in expansion, then loses $250 to downgrades and $750 to cancellations.
Input Summary
Beginning MRR
$10,000
New MRR
$1,500
Expansion MRR
$500
Contraction MRR
$250
Churned MRR
$750
Calculation Breakdown
- 1Revenue gains$1,500 + $500$2,000
- 2Revenue losses$250 + $750$1,000
- 3Ending MRR$10,000 + $2,000 - $1,000$11,000
- 4ARR run rate$11,000 × 12$132,000
- 5Net revenue retention(($10,000 + $500 - $250 - $750) / $10,000) × 10095.0%
Result Summary
Net revenue retention
95.0%
Accounting Monthly Recurring Revenue (Annual) Calculator
The business finishes with $11,000 in MRR and an ARR run rate of $132,000.
Example 2: Expansion-led MRR growth
The business begins with $50,000 in MRR and gains substantial expansion revenue with limited churn.
Input Summary
Beginning MRR
$50,000
New MRR
$4,000
Expansion MRR
$6,000
Contraction MRR
$1,000
Churned MRR
$2,000
Calculation Breakdown
- 1Ending MRR$50,000 + $4,000 + $6,000 - $1,000 - $2,000$57,000
- 2Net MRR change$57,000 - $50,000+$7,000
- 3ARR run rate$57,000 × 12$684,000
- 4Net revenue retention(($50,000 + $6,000 - $1,000 - $2,000) / $50,000) × 100106.0%
Result Summary
Net revenue retention
106.0%
Accounting Monthly Recurring Revenue (Annual) Calculator
Ending MRR is $57,000, producing an ARR run rate of $684,000 and net revenue retention of 106.0%.
Example 3: Churn-heavy month
The business starts at $25,000 in MRR, adds $2,000 in new revenue, but has elevated customer cancellations.
Input Summary
Beginning MRR
$25,000
New MRR
$2,000
Expansion MRR
$500
Contraction MRR
$1,500
Churned MRR
$4,000
Calculation Breakdown
- 1Total gains$2,000 + $500$2,500
- 2Total losses$1,500 + $4,000$5,500
- 3Ending MRR$25,000 + $2,500 - $5,500$22,000
- 4ARR run rate$22,000 × 12$264,000
- 5Net revenue retention(($25,000 + $500 - $1,500 - $4,000) / $25,000) × 10080.0%
Result Summary
Total losses
$5,500
Accounting Monthly Recurring Revenue (Annual) Calculator
The business ends with $22,000 in MRR and a $264,000 ARR run rate.
How to Read Your Results
Ending MRR is the recurring monthly revenue remaining after all movements in the selected month.
ARR is an annualized run rate based on ending MRR; it is not a 12-month revenue forecast.
A positive net MRR change means ending MRR is higher than beginning MRR.
Net revenue retention isolates the opening customer base and excludes revenue from newly acquired customers.
Compare the sizes of expansion, contraction, and churn to understand the sources of revenue movement.
Assumptions & Important Notes
- All examples treat amounts as recurring monthly subscription revenue.
- ARR is calculated by multiplying ending MRR by 12.
- New MRR is excluded from net revenue retention.
- Figures are illustrative estimates and do not represent recognized revenue.
Related Examples
Frequently Asked Questions
What is a good way to use these MRR examples?
Use the same categories in a monthly MRR bridge: beginning MRR, new MRR, expansion, contraction, and churn. Then compare the movement mix across periods.
Does a higher ARR run rate always mean retention improved?
No. ARR can increase because of new MRR even when net revenue retention from existing customers is below 100%.
Should annual contracts be included in MRR?
They may be included if they represent recurring subscription commitments and are converted to a consistent monthly amount under your reporting approach.
What does a negative net MRR change mean?
It means contraction and churn exceeded new MRR plus expansion during the month.
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