SaaS Metrics

Net New MRR

Net new MRR is the change in MRR in a period after expansions, contractions, and churn. It combines growth and retention movements.

Written by MetricKit EditorialReviewed by MetricKit Editorial ReviewUpdated 2026-01-23
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Definition

Net new MRR is the change in MRR in a period after expansions, contractions, and churn. It combines growth and retention movements.

Formula

Net new MRR = new MRR + expansion MRR - contraction MRR - churned MRR

Example

If new MRR is $40k, expansion is $15k, contraction is $5k, and churned MRR is $10k, net new MRR = $40k+$15k-$5k-$10k = $40k.

How to use it

  • Track net new MRR by segment to find durable growth sources.
  • Pair with churn/retention to diagnose whether growth is leaky.
  • Use consistent definitions across months for clean trend analysis.

Common mistakes

  • Mixing MRR (run-rate) with billings or cash (timing differs).
  • Counting reactivations inconsistently (treat them consistently as new or separate).

Measured as

Net new MRR = new MRR + expansion MRR - contraction MRR - churned MRR

Misused when

  • Mixing MRR (run-rate) with billings or cash (timing differs).
  • Counting reactivations inconsistently (treat them consistently as new or separate).

Operator takeaway

  • Track net new MRR by segment to find durable growth sources.
  • Pair with churn/retention to diagnose whether growth is leaky.
  • Use consistent definitions across months for clean trend analysis.
  • Keep Net New MRR consistent by cohort, segment, and period before you use it as a decision signal in planning or reporting.
  • Interpret the metric alongside retention, margin, or payback so one ratio does not hide the real operating trade-off.

Next decision

  • Quantify the impact with Net New MRR Calculator if you need to turn the definition into an operating assumption.
  • Read MRR waterfall: reconcile starting MRR to ending MRR if the decision depends on interpretation, policy, or trade-offs beyond the raw formula.

Where to use this on MetricKit

Calculators

Guides