MRR movement matters
A single MRR number hides what changed. Breaking movement into new, expansion, contraction and churned MRR helps separate acquisition from retention and account expansion.
Example
Starting with $50,000 MRR, adding $8,000 new MRR and $3,000 expansion MRR, then subtracting $1,000 contraction and $4,000 churned MRR, gives ending MRR of $56,000.
Common mistakes
Do not include one-time setup fees in MRR. Annual contracts should be normalized to monthly recurring revenue if your reporting policy treats them as recurring.
Limitations
MRR definitions differ across SaaS companies. Document whether discounts, trials, usage revenue, annual contracts and one-time services are included.
Last reviewed: 2026-05-17