ARR Calculator: Annual Recurring Revenue (Free)
Calculate annual recurring revenue (ARR) instantly: MRR × 12, the investor-standard SaaS scale metric.
ARR (Annual Recurring Revenue) is the annualized value of subscription revenue. Formula: ARR = MRR × 12. Example: $50,000 MRR = $600,000 ARR.
Your current monthly recurring revenue
One-time annual contracts outside MRR
ARR from MRR
$600.0K
MRR × 12 months
Annual Contract ARR
$120.0K
Direct annual contracts
Total ARR
$720.0K
Combined annual run rate
Solid early traction. $100K+ ARR is a key milestone for seed-stage. Focus on finding product-market fit and reducing churn.
How it works
Annual Recurring Revenue (ARR) is the annualized run rate of your subscription revenue. While MRR is your monthly heartbeat, ARR is the metric investors and boards care about most. Track new ARR, expansion ARR, and churned ARR to understand your annual growth engine.
How to use this calculator
Follow these steps to get an accurate ARR Calculator result.
- Open the ARR Calculator and set your currency.
- Enter your current Monthly Recurring Revenue (MRR), this is your base for the ARR calculation.
- Optionally enter Annual Contract Revenue if you have multi-year deals or annual prepayments outside standard MRR.
- Review your total ARR breakdown: MRR × 12 gives your run-rate ARR, and adding annual contracts gives total ARR. Track this monthly to measure annualized growth.
Worked examples
Plug in sample numbers to see how the ARR Calculator formula works in practice.
From MRR
- MRR
- $50,000
ARR = $50,000 × 12 = $600,000
From customers and ACV
- Customers
- 120
- Average ACV
- $5,000
ARR ≈ 120 × $5,000 = $600,000
ACV-based ARR is common for sales-led SaaS.
Benchmarks
Directional ranges—always prefer your own baselines and unit economics.
| Context | Guidance |
|---|---|
| Investor reporting | ARR is the standard SaaS scale metric |
| vs total revenue | ARR excludes most non-recurring revenue |
| Growth | Track new, expansion, and churned ARR separately |
| Run rate | ARR is a run rate, not cash collected this year |
Common mistakes
- Confusing ARR with GAAP revenue — See ARR vs Revenue—ARR is recurring run rate, not total booked revenue.
- Treating ARR as cash in bank — ARR is annualized run rate; cash depends on billing terms.
- Mixing MRR and ARR periods in growth % — Compute growth on the same basis (MoM MRR or YoY ARR).
Frequently Asked Questions
What is ARR?
ARR stands for Annual Recurring Revenue, the annualized value of your recurring subscription revenue. It is calculated as MRR × 12. ARR is the standard metric for measuring SaaS business scale and is used by investors, analysts, and board members to evaluate company health and growth.
How do you calculate ARR?
The simplest formula is ARR = MRR × 12. For a more accurate picture, calculate: ARR = (Total Active Customers × ARPU) × 12 or use the MRR movement approach: Starting ARR + New ARR + Expansion ARR − Churned ARR − Contraction ARR = Ending ARR.
What is a good ARR for a SaaS startup?
The milestones most investors track: $100K ARR (idea validated), $1M ARR (product-market fit), $10M ARR (scale), and $100M ARR (category leader). Growth rate matters more than absolute ARR for early-stage companies: 3x year-over-year at $1M ARR is stronger than 1.5x at $10M ARR.
How is ARR different from revenue?
ARR is a forward-looking run rate based on recurring subscriptions, not actual cash received. GAAP revenue may differ due to annual prepayments, multi-year contracts, and usage-based billing. ARR is a metric, not an accounting figure. It is used for growth tracking and valuation, not tax reporting.
What is the Rule of 40 and how does ARR relate?
The Rule of 40 combines revenue growth rate and EBITDA margin. ARR is the primary input for calculating revenue growth. A company with $1M ARR growing to $1.5M has 50% growth, strong enough to offset negative margins under the Rule of 40 framework.
How fast should ARR grow?
Benchmark by stage: $0–$1M ARR (grow 2–3x annually), $1–$10M (grow 80–150%), $10–$50M (grow 50–80%), $50–$100M (grow 30–50%). Growth rate typically slows as ARR scales. The absolute growth (dollar amount added) should increase even as the percentage decreases.
Related Calculators
MRR Calculator
Calculate monthly recurring revenue (MRR) instantly: Active Customers × ARPU, with growth and churn context for SaaS.
MRR = Active Customers × ARPU
NRR Calculator
Calculate NRR (Net Revenue Retention), also called NDR (Net Dollar Retention), including expansion, contraction, and churn.
NRR = (Starting MRR + Expansion − Contraction − Churn) ÷ Starting MRR × 100
LTV Calculator
Estimate the total revenue a customer generates over their relationship with your business.
LTV = (ARPU × Gross Margin) ÷ Churn Rate
LTV:CAC Ratio
Compare customer lifetime value to acquisition cost to assess whether your growth is profitable and sustainable.
LTV:CAC Ratio = LTV ÷ CAC