Accounting Monthly Recurring Revenue Calculator FAQ
Answers to common questions about MRR, ARR, revenue movements, growth rates and net revenue retention.
Use these answers to understand the calculator's inputs, outputs and practical boundaries. The figures are management metrics and should be aligned with your organization's reporting definitions.
MRR basics
Core definitions used in recurring revenue reporting.
What is MRR?
MRR is the predictable monthly revenue from active recurring subscriptions or contracts under a consistent reporting definition.
What is ending MRR?
Ending MRR is recurring monthly revenue after adding and subtracting the month's revenue movements.
What is new MRR?
New MRR is recurring monthly revenue added by customers who started subscriptions during the month.
What is expansion MRR?
Expansion MRR is additional recurring revenue from existing customers, such as upgrades, additional seats or add-ons.
Revenue movements
How the calculator distinguishes revenue losses and gains.
What is contraction MRR?
Contraction MRR is revenue lost when an existing customer remains active but reduces its recurring spend.
What is churned MRR?
Churned MRR is revenue lost when a customer cancels completely.
Should a customer downgrade be counted as churn?
No. A downgrade is generally contraction if the customer remains active; a full cancellation is churn.
Can a customer generate both expansion and contraction in one month?
It can happen operationally, but reporting is often clearer when movements are netted or classified consistently under one documented method.
Growth and retention
How the calculator measures change in total MRR and existing-customer MRR.
How is MRR growth calculated?
It is the change from starting MRR to ending MRR divided by starting MRR, expressed as a percentage.
What does net revenue retention measure?
NRR measures the change in starting MRR after expansion, contraction and churn, excluding revenue from new customers.
Does NRR include new customers?
No. New customer MRR is excluded so NRR reflects retention and expansion within the starting customer base.
What does NRR above 100% mean?
It means expansion from existing customers was greater than contraction and churn within the starting base.
ARR and reporting use
How to interpret annualized recurring revenue and calculation results.
How is ARR calculated?
This calculator multiplies ending MRR by 12 to create an annualized run-rate estimate.
Is ARR guaranteed annual revenue?
No. It is an annualized snapshot; actual revenue can change with future sales, expansion, downgrades and cancellations.
Should one-time fees be included in MRR?
They are commonly excluded because they are not recurring, unless your internal metric definition specifically includes them.
Can this calculator be used for financial statements?
It is a recurring revenue tracking estimate. Financial statements should follow the accounting policies and revenue recognition rules applicable to the organization.
How is MRR calculated?
Starting MRR plus new and expansion MRR, less contraction and churned MRR, equals ending MRR.
Explore Related Questions
Ready to see what you can calculate?
Open the calculator and get personalized results in seconds.