How to use our MRR calculator
Calculating monthly recurring revenue can give you the insight you require to make appropriate business decisions. Use our MRR calculator to measure the growth and health of your SAAS business!
Our SaaS MRR calculator will determine your monthly revenue rate and give you three other vital pieces of data about your company and compare these numbers with average SaaS data. All you need to do is follow these four easy steps:
- Step #1: First, you must determine the average monthly recurring revenue for each of your new customers. Enter this dollar value into the first field of the month-on-month growth calculator.
- Step #2: Next, enter the total number of customers that you had at the beginning of last month into the following field.
- Step #3: Determine how many new customers you gained over the last month and enter that figure into the "Customers Gained" field.
- Step #4: Finally, enter the total number of customers you lost last month into the fourth field of the MRR calculator.
Once all of this information has been entered, click the green "Calculate" button and allow Textmagic's SaaS mrr tool to work out all of the calculations for you. In just a few moments, you will have all of the critical information that you need.
Textmagic's MRR formula will determine the following info for you:
- MRR Growth Rate - Net MRR Growth Rate measures the month-over-month percentage increase in net MRR.
- MRR - MRR is a measure of the predictable and recurring revenue components of your subscription business.
- Projected MRR - Projected MRR is the forecasted MRR for the next month based on your MRR Growth Rate.
- Customer Churn Rate - Churn rate is the annual percentage rate at which existing customers stop subscribing to a service.
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Why you should use the monthly recurring revenue calculator
If you are a SaaS business owner, you know the importance of predictable revenue streams. This monthly recurring revenue compares your revenue against that of
Many businesses don't know the proper MRR formula or don't know how to calculate monthly recurring revenue; that's why Textmagic has created this important tool that takes all of the hassles out of how to calculate MRR.
Why we built this tool
It's no surprise that the MRR formula can be tricky, and achieving accurate MRR results is imperative to gain proper insight into the health of your business. At Textmagic, we know what it's like to be a fast-growing SaaS business, and we always investigate our expansion MRR and know precisely how to calculate it well.
We want to offer the same MRR calculator service to other growing companies and allow them the opportunity to become familiar with their correct MRR numbers as well.
Benefits of using our free MRR calculator
There are so many benefits to using our SaaS MRR calculator. Not only is it accessible and easy to use, but it provides essential data that your SaaS business needs to plan for the future correctly. Our MRR calculator offers vital information on your net MRR growth rate, your MRR, your future projected MRR, and your company's churn.
What is MRR (monthly recurring revenue)?
MRR is the measure of all of your recurring sales revenue, shown as a monthly sales figure. SaaS companies must track their monthly recurring revenue to track their month-to-month growth.
How to calculate MRR and ARR correctly?
To calculate MRR and ARR correctly, you must use these formulas:
- MRR: Take your average monthly revenue per user and multiply it by the total number of users each month. This will give you the total MRR per month.
- ARR: Take your average annual revenue per user and multiply it by the total number of users each year. This will give you the total ARR.
Why is it essential to measure and optimize MRR?
Measuring and optimizing MRR allows you to set realistic goals and KPIs and ensures that the predicted growth is attained. It also allows you to implement proper marketing strategies to grow your business. Healthy MRR growth is also an indication of good product-market fit and customer satisfaction.
What are the common mistakes in calculating MRR?
Many mistakes occur when calculating MRR, such as:
- Incorrectly including quarterly or annual subscription earnings as a monthly payment.
- Attempting to measure cash flow instead of MRR.
- Including one-time payments in MRR calculations.
- Using data from free-trial users before they convert.
