Measure your SaaS growth quality by comparing new and expansion MRR against churned and contraction MRR.
New MRR ($)
Expansion MRR ($)
Churned MRR ($)
Contraction MRR ($)
Compare MRR gained and MRR lost to understand the quality of SaaS revenue growth.
Add new MRR from new customers and expansion MRR from upgrades, seats, usage, or cross-sells within existing accounts.
Add churned MRR from canceled customers and contraction MRR from downgrades or reduced usage during the same period.
Run the calculator to divide revenue gained by revenue lost. The output includes the ratio, performance label, and net MRR change.
Use the result to see whether new and expansion revenue is outpacing churn and contraction enough to support durable growth.
Use SaaS Quick Ratio to understand whether MRR growth is healthy, fragile, or declining.
01
Look beyond net MRR by separating gains from losses. The ratio shows whether growth is being powered by healthy acquisition and expansion or masked by churn.
02
A weak ratio highlights churn and contraction pressure. Customer success teams can use it to prioritize retention, downgrade prevention, and expansion plays.
03
Track Quick Ratio each month to see whether new bookings, expansion, churn, or contraction are driving changes in recurring revenue momentum.
04
Use the ratio and net MRR change to plan hiring, acquisition spend, and customer success capacity around the true quality of MRR growth.
The SaaS Quick Ratio compares revenue gained from new MRR and expansion MRR with revenue lost from churned MRR and contraction MRR. It measures the quality of recurring revenue growth.
Add new MRR and expansion MRR, then divide that total by churned MRR plus contraction MRR. A higher ratio means revenue gains are strongly outpacing revenue losses.
A ratio above 4 is often considered excellent, 2 to 4 is strong, and around 1 means gains are only offsetting losses. Below 1 means churn and contraction exceed new and expansion MRR.
Expansion MRR shows growth from existing customers through upgrades, added seats, usage, or cross-sells. Including it gives a clearer view of whether the customer base is compounding or merely replacing churn.
Contraction MRR is recurring revenue lost when existing customers downgrade, reduce seats, reduce usage, or move to cheaper plans without fully churning. It should be tracked separately from full churned MRR.
Review Quick Ratio monthly for operating decisions and quarterly for strategic trends. It is especially useful when evaluating net revenue retention, customer success performance, and acquisition quality.
Explore related calculators for traffic, monetization, campaign costs, and growth planning.
Calculate your Compound Monthly Growth Rate to track and communicate consistent revenue momentum.
Open Calculator →
Score your SaaS efficiency using Bessemer's framework to gauge how well your company translates growth into profitability.
Open Calculator →
Measure how efficiently your startup is converting burned capital into new annual recurring revenue.
Open Calculator →
Estimate your SaaS company valuation based on ARR, growth rate, net revenue retention, and gross margins.
Open Calculator →
Compute the Weighted Average Cost of Capital to evaluate investment decisions and company valuation.
Open Calculator →
Calculate your startup's post-money valuation after a funding round using investment amount and equity percentage.
Open Calculator →
Interested in driving growth? Have a general question? We're just an email away.
Email us at : [email protected]
#27, Santosh Tower, Second Floor, JP Nagar, 4th Phase, 4th Main 100ft Ring Road, Bangalore - 560078
