MRR Movement Waterfall
Where recurring revenue actually went: new, expansion, contraction, churn.
Replaces: ChartMogul, Baremetrics and ProfitWell paid tiers
How to use it
Enter your opening recurring revenue and the five movements that happened during the month. The waterfall shows how you got from the opening figure to the closing one, and the ratios underneath say whether the shape of that movement is healthy.
Where the number comes from
- Ending MRR is opening plus new, expansion and reactivation, minus contraction and churn. Every recurring revenue business reduces to those five movements.
- Net new MRR is everything added minus everything lost — the only growth figure that cannot be flattered by a good sales month masking a bad retention one.
- The quick ratio divides money added by money lost. It measures how much of your sales effort is going into growth rather than replacement.
- Gross churn counts only customers who left. Net churn also subtracts expansion and reactivation, so it can be negative.
- Net revenue retention is 100% minus net churn, expressed monthly here rather than annually.
What goes wrong
The part most calculators leave out.
- The five buckets must be mutually exclusive or the waterfall stops tying. A customer who downgrades and then cancels in the same month belongs in churn only — counting them in both double-charges the loss.
- Monthly figures are volatile in small books. One large account cancelling can dominate a month and make a stable business look like it is collapsing. Look at three months together.
- Annual contracts distort monthly movement. If a customer on an annual plan cancels in month seven but stays live until renewal, the month you record the churn is a policy decision, not a fact.
- Net revenue retention above 100% is often quoted from the best-performing customer segment rather than the whole book. Calculated across everyone, including the customers who left, it is usually a lot lower.
- This is a single month. Extrapolating a monthly growth rate to a year by compounding it twelve times assumes every month looks like this one, which none of them will.
The growth month that was really a retention problem
A company opens at 420,000 MRR, signs 38,000 of new business — its best sales month of the year — and closes at 449,000. Growth of 6.9%, and the board deck writes itself. But 21,000 churned and 9,000 contracted, against 17,000 of expansion and 4,000 of reactivation. The quick ratio is 1.97: for every 1 lost, only 1.97 was added. Net churn is positive at 2.1%, so the existing base is shrinking on its own and new sales are doing the work of two teams. The headline growth is real. The dependency it hides is the thing that eventually stops.
Questions
- What is a good SaaS quick ratio?
- Above 4 is commonly cited as efficient growth — four units added for every one lost. Between 1 and 2 means most of your sales effort is replacing revenue you already had. Below 1 the business is contracting.
- What is the difference between gross and net churn?
- Gross churn counts only the revenue that left. Net churn subtracts expansion and reactivation from it, so a company whose existing customers spend more each month can report negative net churn while still losing some customers entirely.
- Should reactivation be its own bucket?
- It is worth separating. Folding returning customers into new business inflates your acquisition performance and hides that some of your growth is recovering from churn rather than reaching new market.
- Does anything I type get sent anywhere?
- No. The whole calculation runs in your browser. Nothing is transmitted, stored, or logged, and there is no account to create.
Last updated .
Put this calculator on your site
Free to embed, on any site, commercial or not. No sign-up and no tracking script — the calculator runs in your reader’s browser exactly as it does here. All we ask is that you keep the credit line.
The small script resizes the frame as the reader changes inputs. Drop it if your CMS strips scripts — the calculator still works, it will just stay at a fixed height.