Methodology: MRR / ARR Growth Calculator

1. Scope

Projects MRR/ARR at 3/6/12 months, Net Revenue Retention, and months to a target ARR. Deterministic compounding; does not model revenue risk distributions.

2. Inputs and outputs

Inputs

currentMrr number (currency)
netNewMrrPerMonth number (currency)
monthlyChurnPercent percent
expansionMrrPerMonth number (currency) default: 0
targetArr number (currency)

Outputs

projectedMrr

MRR at 3, 6, 12 months.
ndr

(starting MRR − churned + expansion) / starting MRR.
monthsToTargetArr

Solve for m such that mrr_m × 12 ≥ targetArr.

Engine source: src/lib/mrr-arr-growth-calculator/engine.ts

3. Formula / scoring logic

mrr_m = mrr_{m-1} + net_new - (mrr_{m-1} * churn) + expansion
ndr   = (starting_mrr - churned + expansion) / starting_mrr

4. Assumptions

Net-new and expansion MRR are constant. Most businesses see ramp and plateau rather than constant growth.
Churn is applied to current MRR each month.

5. Data sources

OpenView SaaS Benchmarks 2024 (NDR percentiles) as of 2024

6. Known limitations

Constant-growth past year one is rarely accurate. Segment by stage.
Expansion revenue mechanics (seat growth, tier upgrades) are bundled into a single input.

7. Reproducibility

Input
currentMrr = $10,000, netNew = $2,000, churn = 4%, expansion = $500, targetArr = $500,000.

Expected output
mrr_12 ≈ $25,500, ndr ≈ 100.5%, monthsToTargetArr ≈ 22.

8. Change log

2026-04-24 methodology page first published.