MRR movement calculator
MRR movement breaks a month’s revenue change into its parts: starting MRR plus new plus expansion, minus contraction and churn. A single growth percentage hides whether you are growing or merely replacing what leaked out.
MRR movement, step by step
The parts matter more than the total because they have different cures. New MRR is a marketing and sales problem. Expansion is a product and pricing problem. Contraction and churn are retention problems, and they are the only ones that compound against you — every month’s churn permanently raises the new revenue you need just to stand still.
Net revenue retention — expansion minus contraction and churn, as a percentage of starting MRR — is the figure investors look at first. Above 100% means your existing customers alone grow your revenue, and a business with NRR above 100% grows even in a month it sells nothing.
Where this number misleads you
Healthy-looking net growth can conceal a serious leak. A business adding 20% new MRR while churning 12% nets 8% growth and looks fine, right up to the point where new sales plateau and the churn keeps running. Always read gross churn next to net growth; the net number is the one that flatters.
Questions people ask
How do I calculate net revenue retention?
Take starting MRR, add expansion from existing customers, subtract contraction and churn, then divide by starting MRR. New customers are excluded entirely. Above 100% means your existing base grows revenue by itself; the best subscription businesses sit between 110% and 130%.
What is the difference between gross and net churn?
Gross churn counts only revenue lost from cancellations and downgrades. Net churn subtracts expansion revenue from that loss and can be negative, which looks excellent. Report both: net churn shows the business outcome, gross churn shows the size of the problem you are papering over.
What counts as expansion MRR?
Any increase in recurring revenue from customers you already had at the start of the period — seat additions, plan upgrades, usage moving into a higher tier, add-ons. Revenue from a customer who signed up this month is new MRR, not expansion, even if they upgraded within the month.