MRR is the metric every SaaS company tracks before anything else. It tells you where you are right now and, more importantly, whether you’re moving in the right direction.
The headline number is your ending MRR after all the moving parts: new customers added, expansions from existing customers, and subtractions from churn. Each component tells a different story.
The four components that move MRR
New MRR is from fresh customers signing up. Expansion MRR comes from existing customers upgrading, buying add-ons, or adding seats. Churned MRR is revenue lost from cancellations and downgrades. Net new MRR = New + Expansion - Churned.
A company growing new MRR at ₹80,000/month but churning ₹75,000 is essentially on a treadmill. Lots of activity, almost no net progress. This is why tracking all four components separately matters.
Net Revenue Retention: the number that separates great from average
NRR = (Starting MRR + Expansion - Churn) / Starting MRR × 100
NRR above 100% means your existing customer base is growing even without any new sales. This is the holy grail for SaaS. The best companies (Snowflake, Datadog) run at 130-150% NRR – meaning they’d grow even if they stopped acquiring new customers entirely.
For Indian SaaS, 95-110% NRR is good. Above 110% is exceptional. Below 90% and you have a retention crisis.
ARR and what it signals to investors
ARR is simply MRR × 12. It’s the annualised revenue run rate, useful for comparing companies across different scales and for Series A/B fundraising conversations.
A company at ₹50L MRR has ₹6Cr ARR. In India’s SaaS ecosystem, ₹1Cr ARR is often considered seed-stage proof of concept. ₹5-10Cr ARR is early Series A territory. ₹50Cr+ ARR gets you into serious growth-stage conversations with global SaaS investors.
Use the churn rate calculator to understand your churned MRR in more detail.