MRR Movements
The five forces behind every change in recurring revenue — and how they bridge starting MRR to ending MRR.
What is it?
MRR movements explain why your recurring revenue changed from one period to the next. Instead of a single number moving up or down, they break the change into five distinct forces — new, expansion, contraction, churn and reactivation. Three add revenue; two take it away.
Drawn as a waterfall, they turn 'MRR went up $5,000' into a story: how much you won from new customers, how much your existing base grew or shrank, and how much walked out the door. That story is where the levers are — a headline that is flat can hide a base that is churning as fast as you acquire.
How to calculate?
Each movement is measured on its own over the period: new MRR from first-time customers, expansion from upgrades and added seats, contraction from downgrades, churn from full cancellations, and reactivation from returning customers. Netting them gives net new MRR — new plus expansion plus reactivation, minus contraction and churn.
The bridge should always reconcile: starting MRR plus every movement equals ending MRR. If it does not, a movement is miscategorised — most often a downgrade booked as churn, or an annual-to-monthly change double-counted on both sides of the ledger.