Expansion MRR & Contraction Calculator

A five-bucket bridge from starting to ending MRR

Starting at $82,000 MRR, adding $6,400 in new business, $2,100 in expansion, and $400 in reactivated accounts, then subtracting $900 in contraction and $1,500 in full churn, nets to +$6,500 for the month -- landing at $88,500 ending MRR, a 7.93% month-over-month growth rate.

Breaking growth into five buckets (new, expansion, reactivation, contraction, churn) instead of one net number shows where growth is actually coming from: here, new business ($6,400) is doing most of the work, with expansion and reactivation contributing smaller amounts, while contraction and churn together only offset $2,400 of gross additions.

The gross additions in this example ($6,400 + $2,100 + $400 = $8,900) are notably larger than the net change ($6,500) -- a reminder that headline net growth can look modest even when new business and expansion are both performing well, simply because losses are eating into the total.

Why each bucket needs to be tracked separately

Five-bucket MRR bridge. Proration rules differ by billing system. How a mid-month upgrade, downgrade, or cancellation gets prorated varies by billing platform, which means the same underlying customer behavior can land in slightly different dollar amounts depending on which system generated the report -- reconcile against your billing system's own definitions before treating this as exact.

Reactivation MRR ($400, customers who churned earlier and came back) is small here but worth tracking on its own -- a growing reactivation bucket over time can signal that churned customers are returning, which is a different signal than pure new-logo growth.

Net new MRR must be interpreted alongside the gross buckets, not instead of them -- two months with identical net new MRR can have very different underlying health if one is driven by strong new business and the other is barely outrunning heavy churn.

Rolling this up to an annual view

For the cohort-based, typically quarterly-or-annual version of this same bridge, the Net Revenue Retention Calculator isolates expansion and contraction for existing customers without the new-business bucket mixed in.

To convert this monthly figure into an annualized run-rate view, the Subscription ARR Calculator handles that conversion.

Frequently Asked Questions (FAQ)