What’s the correct formula for Net New MRR (and why might my number look “off” vs ARR growth)?

Use Net New MRR = New + Expansion + Reactivation − Churned − Contraction. If you’re comparing to ARR, remember ARR is just MRR annualized (MRR × 12), so the same movement can look bigger in ARR terms.

How do I split “Churned MRR” vs “Contraction MRR” so I don’t double-count losses?

Put full cancellations in Churned MRR. Put downgrades/removals of seats or add-ons (customers still active but paying less) in Contraction MRR. Don’t include the same customer movement in both.

My Net New MRR is negative even though I added new customers—what usually causes that?

Your losses (Churned + Contraction) exceeded gains (New + Expansion + Reactivation). Check if a few big downgrades/cancellations happened, or if your “Starting MRR” includes accounts that already churned during the period.

Should I include annual prepayments, setup fees, or usage charges in these inputs?

No. Only include the recurring monthly portion (MRR). Convert annual plans to a monthly equivalent and exclude one-time/variable charges.

Net New MRR Calculator (New + Expansion + Reactivation − Churn − Contraction)

Net New MRR Calculator

Calculate Net New MRR for a period using standard SaaS components (New + Expansion + Reactivation − Contraction − Churn). Includes scenarios, tooltips, and a short “What It Means?” interpretation.

Starting Point

Starting MRR (beginning of period)

MRR Movement (this period)

New MRR

Expansion MRR

Reactivation MRR

Contraction MRR

Churned MRR

Results

Net New MRR $
Ending MRR $
Growth rate (this period) %
Category

What is Net New MRR?

Net New MRR is the net change in Monthly Recurring Revenue over a period after adding gains (new customers, expansions, reactivations) and subtracting losses (contraction and churn).

It matters because it connects your go-to-market output to cash-flow durability, unit economics, and ultimately valuation (better Net New MRR usually supports stronger ARR momentum and healthier NRR/GRR outcomes).

Formula

Example

Assume your period starts with Starting MRR = $50,000 and the MRR movements are:

New MRR = $8,000
Expansion MRR = $3,000
Reactivation MRR = $500
Contraction MRR = $1,000
Churned MRR = $2,000

1) Net New MRR:

2) Ending MRR:

3) Growth rate:

How to Use the Net New MRR Calculator

Enter your starting MRR, then fill in this period’s gains and losses. The calculator returns Net New MRR, Ending MRR, and the period growth rate.

Enter Starting MRR
- In Starting Point, input Starting MRR (beginning of period) — your baseline MRR at the start of the month/period.
Add new revenue from new customers
- In MRR Movement (this period), enter New MRR (MRR from brand-new paying customers).
Add revenue changes from existing and returning customers
- - Enter Expansion MRR (upgrades/add-ons from existing customers).
- Enter Reactivation MRR (MRR from previously churned customers who returned).
Enter revenue lost this period
- - Enter Contraction MRR (downgrades/reductions from customers who stayed).
- Enter Churned MRR (MRR lost from cancellations).
Review the Results panel
- - Net New MRR is computed as:
- Ending MRR is computed as:
- Growth rate (this period) is computed as:

Frequently Asked Questions

Use Net New MRR = New + Expansion + Reactivation − Churned − Contraction. If you’re comparing to ARR, remember ARR is just MRR annualized (MRR × 12), so the same movement can look bigger in ARR terms.
Put full cancellations in Churned MRR. Put downgrades/removals of seats or add-ons (customers still active but paying less) in Contraction MRR. Don’t include the same customer movement in both.
Your losses (Churned + Contraction) exceeded gains (New + Expansion + Reactivation). Check if a few big downgrades/cancellations happened, or if your “Starting MRR” includes accounts that already churned during the period.
No. Only include the recurring monthly portion (MRR). Convert annual plans to a monthly equivalent and exclude one-time/variable charges.

Methodology & Sources

Bibliography

Mark Agnew; Brian O’Connor; A.J. Wasserstein (2020). On the Nature of Revenue: Not All Revenue Is Created Equally (Yale Case) — Yale School of Management https://som.yale.edu/sites/default/files/2025-04/On%20the%20Nature%20of%20Revenue.pdf
Accessed 2025-12-15
Swartz Center for Entrepreneurship (2015). Show Me the Money: Revenue Models (Presentation) — Carnegie Mellon University https://www.cmu.edu/swartz-center-for-entrepreneurship/assets/revenue-models.march-2015.pdf
Accessed 2025-12-15
Jonas Thordal (2024). How do you calculate Monthly Recurring Revenue (MRR)? — Weld https://weld.app/blog/how-do-you-calculate-monthly-recurring-revenue-mrr
Accessed 2025-12-15

Net New MRR Calculator

Starting Point

MRR Movement (this period)

Results

What It Means?

What is Net New MRR?

Formula

Example

How to Use the Net New MRR Calculator

Enter Starting MRR

Add new revenue from new customers

Add revenue changes from existing and returning customers

Enter revenue lost this period

Review the Results panel

Frequently Asked Questions

Methodology & Sources

Bibliography

Other Calculators in SaaS Metrics

Monthly Recurring Revenue (MRR) Calculator

Churned MRR (Cancellation MRR) Calculator

MRR Growth Rate Calculator (MoM, QoQ, YoY)

Annual Recurring Revenue (ARR) Calculator