MRR Renewal Rate

What is MRR Renewal Rate?

Monthly Recurring Revenue (MRR) Renewal Rate is a customer retention indicator. It shows the MRR renewal rate for existing customers and includes expansion MRR as well as downgrades and cancels.
Alternate names: Net MRR Retention Rate, Net $ Retention Rate

Benchmark

In a SaaS business, an MRR Renewal Rate >100% is a growth indicator.

How to calculate MRR Renewal Rate

ƒ Sum(renewing customers MRR) / Sum(MRR of customers due to renew)

Favourable trend

Up is positive

Level of complexity

Intermediate

Date created: Apr 28, 2018

Latest update: May 02, 2019

Tell me more about this metric

MRR Renewal Rate is calculated by dividing the MRR for renewing customers by the total MRR of customers due to renew.
 

Example

Example A, a  company has 100 customers paying $24,000 for annual subscriptions ($2,000 MRR). 10 customers are due for renewal, however only 7 actually renew. The MRR Renewal Rate is

      ($2,000 MRR x 7) / ($2,000 MRR x 10) = $14,000 / $20,000 = 70.0%

Example B, a company has 100 customers paying $24,000 for annual subscriptions ($2,000 MRR). 10 customers are due for renewal, only 9 actually renew, but 1 of these adds a $3000 MRR upgrade. The MRR Renewal Rate is

      ($2,000 MRR x 9) + ($3,000 x 1) / ($2,000 MRR x 10) = $21,000 / $20,000 = 105.0%

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