MRR and ARR movement calculator
Reconcile new, expanded, contracted and churned recurring revenue.
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How it works
Reconcile a subscription business’s recurring revenue from the beginning to the end of a reporting period. The movement bridge separates first-time sales, upgrades, returning customers, downgrades and cancellations, then converts the ending monthly run rate to ARR. Optionally compare the calculated closing balance with your billing report to identify missing or double-counted events.
A few things to know
Run-rate arithmetic, not recognized revenue, cash collections or a forecast. Normalize annual plans and partial-period charges before entering them. Usage-based billing, delinquency, currency conversion and reactivation definitions can differ between reporting systems. This tool does not import billing records or check customer-level event sequences. Losses cannot exceed starting revenue plus entered additions. All values use one currency and one consistent reporting policy.
Results use your inputs. Keep all money amounts in the same currency.
When to use this tool
A closing MRR number tells you the size of your subscription run rate; a movement bridge tells you why it changed. This calculator separates new subscriptions, expansion, returning customers, downgrades and cancellations, then checks the calculated closing balance against an optional observed figure. Use it to explain recurring growth and investigate a billing report that does not reconcile.
- Prepare a monthly founder or finance update with a clear recurring-revenue bridge.
- Find missing cancellation, upgrade or reactivation movements when two MRR reports disagree.
- Convert ending monthly recurring revenue into an annualized run rate without confusing it with annual cash receipts.
How to use mrr and arr movement calculator
Set the opening run rate
Enter starting MRR and normalize every plan to a monthly recurring amount. A 1,200 annual recurring subscription contributes 100 of MRR under that simple normalization, not 1,200 in the payment month.
Classify each movement once
Enter positive amounts in new, expansion and reactivation. Enter losses as positive numbers in contraction and churn; the calculator subtracts them. Keep one-off setup charges outside these recurring buckets.
Reconcile the closing balance
Optionally enter observed ending MRR as an unformatted number. Review the observed-minus-calculated difference and export the bridge. Leave the optional field blank when you only want a scenario.
Growth with cancellations and downgrades
Inputs
Starting MRR 10,000; new 2,000; expansion 500; reactivation 250; contraction 300; churn 1,000; observed ending MRR 11,450.
Result
Calculated ending MRR is 11,450. Net movement is 1,450, a 14.5% increase. Annualized ending ARR is 137,400. The reconciliation difference is 0.
What it means
New and existing-customer additions outweighed the 1,300 of losses. The annualized result describes the closing run rate multiplied by 12; it does not assert that the business collected 137,400 during the year.
Common mistakes to avoid
Entering cancellation losses as negative numbers
The churn and contraction fields expect positive loss amounts. The tool applies the subtraction, so entering negative values would invert their effect and is rejected.
Counting an upgrade twice
An upgrade belongs in expansion, not both new customer MRR and expansion. Keep reactivation separate from a customer’s first subscription. Document your event classification before comparing systems.
Using invoice totals as MRR
Cash payments, partial-period credits, taxes and nonrecurring fees can differ from a normalized subscription run rate. Reconcile the same metric rather than forcing a cash report to match MRR.
Frequently asked questions
Definitions, edge cases, and practical next steps for this tool. Search all tool FAQs ↗
What is the MRR movement formula?
Start with opening MRR, add new, expansion and reactivation MRR, then subtract contraction and churn MRR. The result is ending MRR. Net movement is ending minus starting MRR. All entered amounts must already be normalized to the same monthly recurring basis.
How does the calculator convert MRR to ARR?
It multiplies calculated ending MRR by 12. For 11,450 of ending MRR, the annualized run rate is 137,400. This is a snapshot-based metric. It does not sum invoices across the last 12 months or predict the effects of future growth, renewals or churn.
What is the difference between expansion and new MRR?
New MRR comes from first-time paying customers. Expansion is additional recurring revenue from an existing customer, such as a higher plan, more seats or a recurring add-on. Classifying them separately lets you see whether growth depends on acquisition or increased value from the customer base.
Where do returning customers belong?
Use reactivation for previously churned customers who resume paying under your chosen reporting policy. Do not also count the same amount as new MRR. Different billing tools can use different reactivation definitions, so retain that policy when comparing months or reconciling an external report.
What does a nonzero reconciliation difference mean?
The difference is observed ending MRR minus calculated ending MRR. A positive result means the observed report is higher; a negative result means it is lower. Check missing events, duplicate buckets, discount changes, currency handling and reporting cutoffs. The difference identifies a gap but does not diagnose its cause.
Can starting MRR be zero?
Yes. A new business can enter zero opening MRR and add its first subscriptions. Ending MRR and ARR still calculate normally, but percentage growth is undefined because there is no positive starting denominator. The calculator shows that distinction rather than describing first sales as infinite growth.
Why are large loss amounts rejected?
The entered contraction and churn cannot exceed starting MRR plus the additions in this bridge, because that would create a negative recurring balance. Review overlapping losses and event ordering. When a customer upgrades and later cancels, your report must classify the movements consistently without subtracting the same revenue twice.
Should I use this bridge to calculate retention?
Use the retention calculator for that task. This bridge includes new customers and reactivations and explains total recurring revenue movement. NRR and GRR examine a defined existing customer cohort. Adding new-customer revenue to retention can hide losses among the customers you began the period with.
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Sources and method
Use the references below to check definitions and platform guidance. The model’s scope and limits are explained above. Read our editorial standards.