Revenue Metrics
MaSa

Net New MRR

Net New MRR is the net change in monthly recurring revenue: new MRR plus expansion MRR minus contraction MRR minus churned MRR. A positive net new MRR means your revenue base is growing. For early-stage SaaS, net new MRR above 15% of total MRR is healthy.

Why Net New MRR Matters

Net New MRR tells you whether your recurring revenue engine is accelerating or decelerating. A business can add $50K in new MRR but still shrink if churn and contraction exceed that amount. Decomposing Net New MRR into its four components (new, expansion, contraction, churn) reveals which lever drives growth and which one drags it.

How to Calculate Net New MRR

Add New MRR and Expansion MRR, then subtract Contraction MRR and Churned MRR. A positive result means your recurring base grew; negative means it shrank.

Net New MRR Formula
Net New MRR = New MRR + Expansion MRR − Contraction MRR − Churned MRR

Net New MRR Calculator

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Net New MRR
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Industry Benchmarks

SegmentGoodAveragePoor
Early-stage SaaS>20% of MRR5–20% of MRR<5% or negative
Growth SaaS>10% of MRR3–10% of MRR<3% of MRR
Mature SaaS>5% of MRR1–5% of MRR<1% of MRR
Consumer Subscription>15% of MRR5–15% of MRR<5% of MRR

Expert Tips

If churned MRR consistently exceeds new MRR, you have a leaky bucket problem that no amount of sales will fix. Focus on retention before acquisition.

Expansion MRR from existing customers is the cheapest revenue you can earn. If expansion is less than 20% of net new, you likely have a pricing or upsell gap.

Chart each component monthly on a stacked bar graph. Visually seeing the balance between growth and loss is more powerful than any single number.

Track net new MRR per sales rep and per cohort to isolate which channels and customer segments contribute most to sustainable growth.

Frequently Asked Questions

What is Net New MRR?
Net New MRR is the net change in your monthly recurring revenue. It equals new customer MRR plus expansion revenue from existing customers, minus contraction (downgrades) and churned (cancelled) MRR. It tells you whether your recurring revenue base is growing or shrinking.
What are the components of Net New MRR?
The four components are: New MRR (revenue from first-time subscribers), Expansion MRR (upgrades and add-ons from existing customers), Contraction MRR (downgrades), and Churned MRR (cancellations). Each component tells you something different about business health.
What is a healthy Net New MRR ratio?
For early-stage companies, net new MRR should represent 15-25% of total MRR each month. For growth-stage companies, 5-15% is typical. If net new MRR is negative, you're losing more revenue than you're adding — an urgent signal to investigate churn.
How does Net New MRR relate to NRR?
NRR measures retention from existing customers only (expansion minus contraction minus churn). Net New MRR adds new customer revenue on top of that. You can have positive Net New MRR even with poor NRR if new sales outpace losses — but this isn't sustainable.

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Business Models Using Net New MRR

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