Break down MRR into new, expansion, contraction, and churned components with waterfall charts and growth rate trends.
MRR growth can conceal very different customer activity. This calculator reconciles starting monthly recurring revenue with new subscriptions, expansion from existing customers, contraction, and fully churned MRR, then presents the movements as a waterfall and tracks growth rates by period. Positive growth may still accompany substantial contraction or churn when new business offsets those losses. The most common mistake is treating contraction and churn as interchangeable: contraction reduces an active customer's recurring amount, while churn removes that customer's recurring amount entirely.
A concrete input and expected output from the current implementation.
Input
Starting MRR: $10,000 New MRR: $1,000 Expansion MRR: $500 Contraction MRR: $200 Churned MRR: $800
Expected output
Ending MRR: $10,500 Positive MRR movements: $1,500 Negative MRR movements: $1,000 Net MRR change: +$500 MRR growth rate: 5.00% Waterfall: $10,000 starting, +$1,000 new, +$500 expansion, -$200 contraction, -$800 churned, $10,500 ending.
The reconciliation is $10,000 + $1,000 + $500 - $200 - $800 = $10,500. The $500 net increase divided by $10,000 starting MRR produces a 5.00% growth rate.
For each period, the calculator begins with starting MRR. New MRR and expansion MRR increase the balance, while contraction MRR and churned MRR reduce it. The resulting ending MRR is the next point in the reconciliation. The waterfall makes each contribution visible, so identical ending balances can be distinguished by the customer movements that produced them.
The net MRR change is the combined positive movements minus contraction and churn. Dividing that change by starting MRR gives the period's MRR growth rate. When several periods are entered, the trend shows whether growth is accelerating, slowing, or turning negative. The rate describes the net result, not the individual strength of acquisition, expansion, or retention.
No. Doing so would count the same loss twice. Use contraction for a reduction in recurring value where the customer or subscription remains active, and churn for recurring value that disappears completely. If an account retains one subscription but cancels another, classify the movements according to the consistent account-level or subscription-level policy used for the rest of the data.
No. MRR is an operational recurring-revenue measure based on normalized subscription value. Recognized revenue follows accounting requirements concerning contract obligations, timing, and allocation, so it can differ from MRR because of annual prepayments, implementation services, usage charges, credits, or other contract terms. Use the calculator for recurring-revenue movement analysis, not as a replacement for the accounting ledger.
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