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SaaS metrics: MRR, churn, NRR and the Rule of 40

Calculate the metrics investors check in a subscription software company: MRR and ARR, new MRR, expansion, revenue and customer churn, net revenue retention (NRR), quick ratio, LTV, CAC payback and the Rule of 40, with a market benchmark for each one.

Educational simulation. Not investment advice. Results are estimates based on the data you enter and do not replace advice from a qualified professional.

Reviewed on Nov 1, 2026

Last month

Example figures for a B2B SaaS. Use the numbers from your last closed month.

Recurring revenue
Customers and acquisition

Cash used in the month (outflows minus inflows). Fill it in to see the burn multiple; left blank, it is not calculated.

Your inputs stay only on this browser and are not sent anywhere. Untick to delete them.

—ARR (annual recurring revenue)
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MRR bridge for the month

From starting to ending MRR: what came in from new customers and expansion and what went out through contraction and cancellations.

Tap the chart to see the values.

MRR over the next 24 months at the same pace

Projection keeping this month’s new MRR and its expansion, contraction and churn rates.

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Metrics and benchmarks

The summary lists your inputs, results, formulas, assumptions and sources. The full report also includes the charts and interpretations, in color. In the print dialog, choose Save as PDF.

Method, assumptions and sources

Formulas

Ending MRR = starting + new + expansion − contraction − canceled; ARR = MRR × 12
Gross revenue churn = (contraction + canceled) ÷ starting MRR; annual NRR = ((starting MRR + expansion − contraction − canceled) ÷ starting MRR)^12
Quick ratio = (new + expansion) ÷ (contraction + canceled); customer churn = canceled ÷ customers at start
CAC = sales and marketing ÷ new customers; LTV = ARPU × gross margin ÷ customer churn; payback = CAC ÷ (ARPU × gross margin)
Rule of 40 = annualized MRR growth + EBITDA margin
Burn multiple (optional) = net burn in the month ÷ net new ARR in the month; net new ARR = (ending MRR − starting MRR) × 12

Assumptions and limits

  • Educational simulation. The 24-month projection keeps the month’s new MRR and its expansion, contraction and churn rates.
  • Benchmarks are general for B2B SaaS and vary by stage, price point and segment. Use the numbers from a closed month.

Official sources and references

Frequently asked questions

What is MRR?

Monthly recurring revenue: the sum of all active subscriptions in the month, excluding one-off revenue such as setup fees. ARR is MRR multiplied by 12.

What is NRR?

Net revenue retention: the revenue of a group of customers after a period, adding expansion and subtracting contraction and cancellations. Above 100%, the base grows on its own.

How do I read the default example?

MRR went from $100,000 to $104,500 (+4.5% in the month), an ARR of $1,254,000. Revenue churn of 4.5% is above the benchmark, but expansion lifts NRR to 106% a year. A quick ratio of 2.0 and LTV ÷ CAC of 2.9× are slightly below ideal; the Rule of 40 scores 50 and passes.

What churn is acceptable in SaaS?

In B2B SaaS a common benchmark is up to 2% a month, for both customers and revenue. Products for small businesses usually churn more; enterprise contracts churn much less.

What is the Rule of 40?

Annual revenue growth plus EBITDA margin, in percent, should be at least 40. It lets fast-growing companies run at a loss while asking slow growers to be profitable.

Where do I get each number?

From your billing or subscription system: starting MRR, new MRR, upgrades, downgrades and cancellations, plus customer counts. Sales and marketing spend includes ads, tools and the sales team’s salaries and commissions. Margins come from the month’s income statement.

What are the limits of this calculator?

It looks at a single month, which may be unusual; use a three-month average before deciding. Benchmarks are general for B2B SaaS and vary by stage, price point and segment. For valuation or fundraising, have an accountant or advisor review the numbers.

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SaaS metrics: MRR, churn, NRR and the Rule of 40

Subscription software (SaaS) companies are judged by their own set of metrics, focused on recurring revenue and how much of it stays from one month to the next. Investors look at these numbers before anything else.

Recurring revenue

  • MRR: monthly recurring revenue, the sum of all active subscriptions in the month. ARR = MRR × 12.
  • MRR bridge: ending MRR = starting MRR + new customers + expansion (upgrades) − contraction (downgrades) − cancellations.

Retention

MetricFormulaBenchmark
Gross revenue churn(contraction + canceled) ÷ starting MRRup to 2% a month
NRR (net revenue retention)(starting MRR + expansion − contraction − canceled) ÷ starting MRRabove 100% a year
Customer churncustomers who canceled ÷ customers at the startup to 2% a month in B2B

With NRR above 100%, the existing base grows on its own, even with no new customers: expansions make up for cancellations.

Efficiency

  • Quick ratio: (new MRR + expansion) ÷ (contraction + canceled). It shows how much comes in for every dollar that leaves. Above 4 is efficient.
  • LTV ÷ CAC: benchmark of 3 times or more.
  • CAC payback: 12 to 18 months or less.

Rule of 40

Annual revenue growth (%) + EBITDA margin (%) should be at least 40. A company growing 70% a year with a −20% margin scores 50 and passes. In the calculator’s example, MRR grows 4.5% in the month, about 70% annualized, so with a −20% margin the score is 50. The rule balances growth and profitability: growing fast with losses is acceptable, but slow growth requires a high margin.