Monthly recurring revenue metrics and growth tracking
Projections assume consistent growth and churn rates. Actual SaaS metrics vary significantly by business model and stage.
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Monthly Recurring Revenue — predictable subscription revenue billed monthly. MRR is the key metric for SaaS businesses. It excludes one-time fees, overage charges, and professional services. MRR growth rate is the #1 metric investors look at.
Rule of 40: Growth rate + Profit margin should exceed 40%. SaaS companies growing 40%+ annually often trade at premium valuations. 20-30% is healthy for post-PMF (product-market fit) companies.
New customer acquisition, expansion revenue (upgrades, seat expansion), and contraction reduction (minimizing churn). Net New MRR = New MRR + Expansion MRR - Churned MRR. Focus on all three levers.