What moves the curve
Every month, MRR changes for four reasons:
- New MRR: new customers.
- Expansion: existing customers upgrade or add seats.
- Contraction: downgrades and new discounts.
- Churn: cancellations.
Net new MRR = new + expansion − contraction − churn. The curve only shows the result, so two businesses with the same curve can be in very different shape.
Common shapes
A steady climb
New MRR comfortably beats churn every month. The question is whether it’s accelerating (the slope gets steeper) or just linear. Compare your monthly growth rate over time, not only the total.
Step jumps
Flat months, then a sudden jump: usually a launch, a price change, a big customer or a post that took off. Note what caused each step; it’s your best guide to what to do again.
A plateau
New MRR is roughly equal to churn. Growth often stalls this way as the customer base gets bigger: the same churn rate removes more each month. Look at churn first, then at acquisition.
A dip
A drop after growth: a large customer leaving, a failed payment wave, an expired coupon on many accounts, or real churn. Check which before reacting. A dip followed by recovery is a good story to tell publicly.
Spikes that fall back
A one-month spike that disappears usually means something is counted that isn’t monthly recurring revenue: a yearly payment counted in one month, or one-time sales. Fix the calculation before drawing conclusions.
Check before you share it
- Yearly plans are spread over 12 months, not counted when paid.
- One-time payments and taxes are left out.
- The period you show isn’t cropped to hide a dip.
- Milestones are real: crossing $1K after a dip below it isn’t a second “first $1K”.
How to calculate MRR in Stripe goes through the rules in detail.
Turn the curve into a post
A curve that draws itself, with each milestone marked as it’s crossed, is easier to read in a feed than a static chart. MotionMRR makes that video from your real data, with the option to hide the amounts and keep the shape. To look ahead instead of back, use the MRR growth calculator.