Definition
The bridge, often drawn as a waterfall, answers “why did MRR change?” It is the single most useful chart in a SaaS board pack, because every growth question decomposes into one of its bars.
Formula
MRR movementsEnding MRR = Starting MRR + New + Expansion + Reactivation − Contraction − Churn
Example
Demo Co, October: $246.1K + $9.8K new + $4.2K expansion − $1.9K contraction − $3.1K churn = $255.1K.
Benchmarks
The point is consistency: the same categories, defined the same way, every month, tying to billing.
Common mistakes
- A bridge that doesn’t tie to the MRR reported elsewhere.
- Plan changes booked as churn plus new.
- No reactivation category, so returning customers inflate new business.
Examples use Demo Co, a fictional $3M ARR SaaS company, or a generic company where noted. Benchmarks are common reference points, not targets for every business.