Software and IT services
Subscription MRR and ARR bridge
Reconcile recurring revenue changes and distinguish new sales from starting-customer retention.
Your inputs
Complete the fields for your selected method. Zero means intentionally zero, not unknown. Currency selection labels amounts; it does not convert exchange rates.
How this calculation works
ending MRR = starting + new + expansion + reactivation - contraction - churn; ARR = ending MRR ×12
Normalize recurring amounts to monthly values and keep beginning-cohort changes separate from new and reactivated customers. On this simplified basis, contraction and churn are reductions of starting MRR. ARR is an annualized run rate, not annual cash receipts or a sales forecast. Excludes taxes, one-time charges and accounting revenue recognition. Use your own records for the same scope and period. Example figures are illustrative, not industry benchmarks. Results exclude income taxes and any cost you have not entered. Check the result before pricing work or committing resources.
What information do I need?
Use records for the same job, equipment or accounting period. Only the fields for your selected entry method are required. An unknown amount is not zero.
Input definitions and where to find them
- Starting monthly recurring revenue (selected currency): Use a supplier quote, invoice, payroll record or allocated cost for the exact job or period named here. Include this amount only once.
- New-customer MRR added (selected currency): Use a supplier quote, invoice, payroll record or allocated cost for the exact job or period named here. Include this amount only once.
- Starting-cohort expansion MRR (selected currency): Use a supplier quote, invoice, payroll record or allocated cost for the exact job or period named here. Include this amount only once.
- MRR from previously inactive customers (selected currency): Use a supplier quote, invoice, payroll record or allocated cost for the exact job or period named here. Include this amount only once.
- Starting-cohort contraction MRR (selected currency): Use a supplier quote, invoice, payroll record or allocated cost for the exact job or period named here. Include this amount only once.
- Starting-cohort canceled MRR (selected currency): Use a supplier quote, invoice, payroll record or allocated cost for the exact job or period named here. Include this amount only once.
Use the Where to find this value controls beside the inputs for available work-it-out helpers. Estimates remain your assumptions; a helper does not verify the source figures.
Worked example
Example amounts use US dollars (USD).
Example answer: Ending monthly recurring revenue is $11,700.00 for the illustrative inputs below.
Example inputs
- Starting monthly recurring revenue: $10,000.00
- New-customer MRR added: $2,000.00
- Starting-cohort expansion MRR: $500.00
- MRR from previously inactive customers: $200.00
- Starting-cohort contraction MRR: $300.00
- Starting-cohort canceled MRR: $700.00
- Ending monthly recurring revenue
- $11,700.00
- Annualized recurring revenue run rate
- $140,400.00
- Net retention of starting MRR
- 95.00 %
- Gross retention of starting MRR
- 90.00 %
These illustrative values are not recommended rates or industry averages. Replace every example input with your own figures.
Use the result well
Reconcile recurring revenue changes and distinguish new sales from starting-customer retention. Inputs come from your own records and stated assumptions; no rates or legal limits are looked up.
Keep inputs on the same scope and time basis. Calculations retain precision internally; displayed values generally round to two decimal places, with extra precision for very small values and whole-unit rounding where required. Economic comparisons describe your supplied assumptions and do not guarantee future results.
This tool provides business arithmetic. It does not approve engineering designs, establish legal or tax treatment, select equipment or certify safe operating conditions.