SaaS metric guide
How to Calculate MRR for SaaS
Monthly recurring revenue is the normalized subscription revenue a SaaS business expects from active recurring plans in one month. It is the baseline for ARR, churn analysis, retention work, and revenue forecasting.
MRR formula
MRR = sum of monthly recurring subscription revenue from active customers
For a simple early-stage model, you can estimate MRR as active customers multiplied by average monthly subscription price. For a real operating model, separate new MRR, expansion MRR, contraction MRR, and churned MRR.
Include
- Monthly subscription plan revenue.
- Annual contracts normalized into monthly revenue.
- Recurring add-ons, seats, or usage fees when they repeat.
Exclude
- One-time setup or implementation fees.
- Non-recurring consulting projects.
- Temporary launch revenue that will not repeat.
Worked example
If a SaaS company has 80 active customers paying $125 per month, estimated MRR is 80 x $125, or $10,000. If 10 of those customers pay $1,500 annually, each annual customer contributes $125 of normalized MRR because $1,500 divided by 12 equals $125.
Use MRR in Aura Revenue
Enter current MRR into the SaaS MRR forecasting calculator, then test growth and churn assumptions to see how the revenue base changes over time.