Yusuf Bayrak
    Back to Free Tools

    ARR Calculator

    ARR (Annual Recurring Revenue) shows the annualised recurring revenue of a subscription business. Enter MRR, or derive it from customer count and average revenue per user.

    //Calculator
    — or —
    // Annual Recurring Revenue (ARR)
    $0
    ARR = MRR × 12
    //Guide

    What is ARR and why does it matter?

    ARR (Annual Recurring Revenue) is the sum of contractual, recurring revenue a subscription business expects over a year. One-off sales, setup fees and variable usage revenue are excluded — only predictable, recurring line items are counted. That's why ARR is the primary financial metric for SaaS growth, health and predictability.

    Investors use ARR as both a valuation anchor and an operational KPI. Compared to monthly MRR, ARR gives a de-seasoned view and provides a more stable reference for annual planning, budgeting and goal setting. Sub-breakdowns like Net New ARR, Expansion ARR and Churned ARR reveal where growth is actually coming from.

    ARR shouldn't be read in isolation. Interpret it alongside growth rate, net revenue retention (NRR) and CAC payback. Strong ARR growth becomes a sustainable SaaS business only when it is paired with healthy unit economics.

    //Frequently Asked Questions

    What's the difference between ARR and MRR?

    MRR is monthly recurring revenue; ARR is its annualised form. The simple relationship is ARR = MRR × 12, but ARR is the standard for annual planning, cohort analysis and investor communication.

    Do one-time revenues count toward ARR?

    No. Setup fees, consulting, one-off licence sales and variable usage revenue are excluded. ARR only includes contractual, recurring subscription revenue.

    What is a healthy ARR growth rate?

    Early-stage SaaS targets 100%+ annual ARR growth; scale-ups treat 40-60% as good. It varies with sector, TAM and customer segment.

    What is Net New ARR?

    New ARR added in a period plus expansion ARR from existing customers, minus churn and contraction ARR. It shows the true quality of growth.