ARR calculator
Annual recurring revenue (ARR) calculator
ARR annualizes monthly recurring revenue so you can report subscription scale on a yearly basis. The basic formula is ARR = MRR × 12. Read the ARR definition for contracted annual values, ARR vs MRR, and how product teams weight feedback by customer ARR.
What ARR means
Annual Recurring Revenue is the yearly run-rate of active subscriptions. Boards and investors prefer ARR because it smooths month-to-month swings. It is not cash collected this year, and it is not GAAP revenue. If you need the formal definition, examples, and pitfalls, see what ARR is.
ARR vs MRR
Monthly Recurring Revenue (MRR) is the operating view. ARR is the same recurring base expressed annually. This calculator uses ARR = 12 × MRR, which is correct when nearly all contracts are monthly. If you mix annual prepay with monthly plans, convert each contract to a twelve-month value first so you do not double-count.
What each input means
- MRR: Current monthly recurring revenue from active subscriptions. Exclude trials, setup fees, and one-time services.
- ARR: Annualized recurring revenue,
MRR × 12.
How to use this ARR calculator
- Enter MRR from billing, or compute it first with the MRR calculator.
- Use the ARR result for annual budgets, board decks, and hiring plans.
- Pair ARR with net revenue retention so new logos are not hiding churn.
Interpreting results
- Today’s ARR: $69,600.00 based on MRR of $5,800.00.
- ARR moves with churn and expansion. Model net retention before you treat this number as next year’s budget.
- A jump in ARR from one large annual contract can look like growth even if monthly logo volume is flat. Segment new, expansion, and churned ARR.
Use case: revenue-weighted feedback
Product teams in B2B SaaS should not rank a public board by votes alone. Attach customer ARR to each request so a $200k account asking for an export is visible beside 40 free-tier upvotes. See the B2B customer feedback use case for that workflow in Featul: private boards for key accounts, then a shared roadmap and changelog.
Common pitfalls
- Including one-time fees. ARR should reflect recurring revenue only.
- Annualizing a promotional or seasonal month. Average a clean period if MRR is volatile.
- Counting a three-year prepayment as three years of ARR at once. Use annual contracted value.
Mixed monthly and annual contracts
This calculator annualizes a single MRR input. If some customers pay monthly and others prepay annually, convert each group first: monthly ARR = monthly MRR × 12; annual ARR = sum of those contracts’ yearly value. Add the two. Do not take a month that includes a large annual invoice and multiply that month by 12. The definition page walks through a numeric mix of $50/month plans and $12,000 annual plans.
ARR FAQs
Is this the same as cash this year? No. ARR is run-rate of active subscriptions, not cash collected.
Can I enter annual contract value here? Divide that annual value by 12, enter it as MRR, or skip this tool and sum contracted annual values as described in the ARR definition.
How should product use this number? Attach customer ARR to feature requests so roadmap scoring reflects revenue at risk. See the B2B feedback use case.