ARR & MRR Calculator
3.0% net growth a month compounds to 42.6% over a year.
How the ARR & MRR calculation works
MRR is customers times monthly price
120 customers paying an average of $49 a month is $5,880 of MRR.
ARR is MRR times 12
$5,880 × 12 = $70,560 ARR. To go the other way, divide ARR by 12.
Spread annual plans over 12 months
A customer paying $588 a year adds $49 to MRR, not $588 in the month they pay.
Project with net monthly growth
3% net MRR growth a month compounds to 42.6% in a year, taking $5,880 MRR to $8,383.
Worked example. 120 customers pay an average of $49 a month: $5,880 MRR and $70,560 ARR. At 3% net growth a month, MRR reaches $8,383.47 in 12 months, an ARR run rate of $100,602.
ARR & MRR FAQ
What is ARR?
ARR stands for annual recurring revenue: the subscription revenue your customers are signed up to pay over a year, at today's rate. Subscription and SaaS businesses use it to track size and growth.
How do I calculate ARR?
The ARR formula is ARR = monthly recurring revenue × 12. $10,000 of MRR is $120,000 ARR. If you start from customers, ARR = customers × average monthly price × 12.
What is MRR and how do I calculate it?
MRR is monthly recurring revenue. Add up what every paying customer is charged for one month, or multiply customers by the average monthly price. 120 customers at $49 a month is $5,880 MRR. Spread annual plans over 12 months.
What is the difference between ARR and MRR?
Only the time period. MRR is the recurring rate for one month and ARR is the same rate for a year, so ARR is always MRR × 12. Monthly plans are often tracked in MRR; annual and multi-year contracts are often reported as ARR.
How do I convert ARR to MRR?
Divide ARR by 12. $60,000 ARR is $5,000 MRR.
What counts as recurring revenue?
Subscription fees customers pay on a schedule. One-time setup fees, consulting and hardware sales are not part of MRR or ARR.
Is ARR the same as annual revenue?
No. ARR is a snapshot of the current recurring rate multiplied out to a year. Actual revenue for the year depends on growth, churn and one-time sales.
Is ARR the same as annual run rate?
Not quite. Annual run rate takes any recent period of total revenue and scales it to a year: $25,000 in a quarter × 4 = $100,000. ARR uses only recurring subscription revenue, so it leaves out one-time sales that a run rate would include.