Break your monthly recurring revenue into its five movements to see ending MRR, net new MRR, growth rate and your SaaS quick ratio — the numbers behind the headline.
Last month's MRR, before any movement.
From brand-new customers this month.
Upgrades & add-ons from existing customers.
Win-backs from previously churned customers.
Downgrades from existing customers.
Lost to full cancellations this month.
What the SaaS quick ratio — MRR added divided by MRR lost — tells you about the health of your growth.
| Quick Ratio | Band | What it means |
|---|
losing more than you add
new revenue mostly backfills losses
solid net growth, manageable churn
strong, durable growth
MRR is the normalised recurring revenue from your active subscriptions each month. But the headline number hides the story. Every month, five movements push it up or down: new (fresh customers), expansion (upgrades), and reactivation (win-backs) add revenue; contraction (downgrades) and churn (cancellations) take it away.
Net new MRR is the sum of all five. Two companies can post the same net new MRR with completely different health — one growing on expansion with near-zero churn, another sprinting on new logos while leaking out the back. Splitting MRR into movements is the only way to see which lever is working.
Start + New + Expansion + Reactivation − Contraction − Churned (New + Expansion + Reactivation) ÷ (Churned + Contraction) Example: $50K start, +$8K new, +$4K expansion, +$1K reactivation, −$2K contraction, −$3K churn = $58K ending, +$8K net new, quick ratio 2.6.
When expansion MRR outpaces contraction and churn, your existing base grows on its own — that's negative net churn, the engine behind the best SaaS companies. You can grow even if new-customer acquisition stalls, because the customers you already have are worth more each month.
Churn and contraction set the ceiling on growth. A low quick ratio means you're running hard just to stay still — every new dollar is half-spent replacing a lost one. Watching gross vs net MRR churn tells you whether the fix is retention, pricing, or onboarding.
MRR (Monthly Recurring Revenue) is the predictable, normalised revenue your business earns each month from active subscriptions. It excludes one-off charges and is the foundation of SaaS reporting. The power of MRR is in the movement: tracking how new, expansion, contraction, churned and reactivation revenue change it month to month tells you far more than the headline number alone.
Start with last month's MRR, then add new MRR, expansion MRR and reactivation MRR, and subtract contraction MRR and churned MRR. Ending MRR = starting + new + expansion + reactivation − contraction − churned. Net new MRR is simply ending MRR minus starting MRR — the single number that captures whether you grew or shrank.
Gross new MRR is everything that moved you up: new + expansion + reactivation. Net new MRR is the bottom line after losses: gross new minus contraction and churn, which equals ending MRR minus starting MRR. A healthy business can post strong gross new MRR while net new MRR is flat or negative if churn and downgrades are eating the gains.
The quick ratio compares the MRR you added to the MRR you lost: (new + expansion + reactivation) ÷ (churned + contraction). A ratio of 4 means you add $4 for every $1 you lose — the widely cited benchmark for efficient growth. Below 1 means you're shrinking; 1 to 2 means new revenue mostly backfills losses; 2 to 4 is solid net growth; 4 and up is efficient.
Gross MRR churn counts only revenue lost to cancellations: churned ÷ starting MRR. Net MRR churn nets expansion against losses: (churned + contraction − expansion) ÷ starting MRR. When expansion exceeds churn and contraction, net MRR churn goes negative — that's negative net churn, the holy grail where your existing customers grow faster than they leave.
It depends on stage. Early-stage SaaS often grows MRR 10-20% per month; at scale, 5-10% is strong and 2-3% is solid past $10M ARR. But the rate matters less than its composition: growth led by expansion and low churn compounds, while growth propped up by heavy new-customer acquisition against high churn is fragile.
The same net new MRR can hide very different businesses. One company adds $50K of new logos while losing $40K to churn; another adds $15K of new and $5K of expansion while losing nothing. Both net +$10K, but the second is far healthier. Breaking MRR into its five movements is the only way to see which growth lever is actually working — and which is leaking.
Yes. If your contraction and churned MRR outweigh new, expansion and reactivation, ending MRR drops below starting MRR and net new MRR turns negative. The calculator flags it, shows a quick ratio below 1, and surfaces insights on where the leak is coming from so you can act on the trend rather than the snapshot.
Calculators are a snapshot. Mowt breaks your MRR into new, expansion, contraction, churn and reactivation automatically — straight from Stripe, updated daily.
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