SaaS MRR Calculator Formula
Understand the math behind the saas mrr calculator. Each variable explained with a worked example.
Formulas Used
Monthly Recurring Revenue (MRR)
mrr = customers * avg_revenue_per_customerAnnual Recurring Revenue (ARR)
arr = customers * avg_revenue_per_customer * 12ARPU (per customer/month)
arpu = avg_revenue_per_customerVariables
| Variable | Description | Default |
|---|---|---|
customers | Number of Customers | 250 |
avg_revenue_per_customer | Avg Revenue Per Customer (ARPU)(USD) | 99 |
How It Works
How to Calculate SaaS MRR
Formula
MRR = Number of Customers x Average Revenue Per Customer ARR = MRR x 12
MRR is the single most important metric for SaaS businesses. It represents predictable, recurring monthly revenue and is used to measure growth, forecast revenue, and value the business.
Worked Example
A SaaS company with 250 customers paying an average of $99/month.
- 01MRR = 250 x $99 = $24,750
- 02ARR = $24,750 x 12 = $297,000
- 03ARPU = $99/customer/month
Frequently Asked Questions
What is MRR vs ARR?
MRR (Monthly Recurring Revenue) is recurring revenue per month. ARR (Annual Recurring Revenue) is MRR x 12. MRR is used for month-to-month tracking; ARR is used for annual planning and valuation.
How do I increase MRR?
Four ways: (1) Acquire new customers, (2) Increase ARPU through upsells and price increases, (3) Reduce churn to retain more customers, (4) Expand revenue from existing customers with add-ons.
Learn More
Guide
Understanding SaaS Metrics
A comprehensive guide to SaaS metrics including MRR, ARR, churn rate, LTV, CAC, and the Rule of 40. Learn what to track and how to benchmark your SaaS business.
Ready to run the numbers?
Open SaaS MRR Calculator