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Annual Recurring Revenue Calculator

Turn MRR into annual run rate

Result

$510,000.00
$42,500.00

How it is calculated

ARR = MRR × 12. MRR is the monthly recurring revenue: the predictable subscription income you bill in one month, in dollars. The tool multiplies it by twelve and shows both the annual figure and the MRR you entered, with two decimals. A negative MRR gives no result.

Only the number you type is used, so the quality of the answer depends on what you counted as MRR. Normally that means active subscriptions at their monthly price, with annual plans divided by 12, and without one-off fees, setup charges or usage overages that will not repeat. ARR here is a run rate, not a forecast: it does not account for churn, upgrades or new customers.

Worked example

A software product has 42,500 of recurring revenue billed every month. ARR = 42,500 × 12 = $510,000.00. If next month the MRR grows to 45,000, the same calculation would give $540,000, which shows how every extra 1,000 of MRR adds 12,000 of ARR.

Try this example →

Common mistakes

  • Including one-time revenue such as setup fees, consulting or hardware in MRR: it inflates ARR with income that will not recur.
  • Entering a whole annual contract as MRR: a prepaid 12,000 annual plan contributes 1,000 to MRR, and multiplying 12,000 by 12 overstates it twelvefold.
  • Treating a single record month as the run rate: a seasonal spike or a one-off pile of signups carries straight through to ARR.
  • Using gross billings before refunds, discounts or failed payments: ARR should reflect what customers actually pay.

Sources

About this calculator

This calculator converts monthly recurring revenue into annual recurring revenue with a simple multiplication: ARR = MRR × 12. Because ARR annualizes whatever the current monthly run rate is, it isn't a forecast — a single unusually large or small month carries straight through to the annual figure.

SaaS founders and finance teams report ARR to investors because it's the standard yardstick venture capital firms use to size and value subscription businesses, and it lets a company compare its own growth trajectory month over month on a scale that's easier to talk about than raw MRR.

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Comments (1)

  • Editorial team

    ARR is most informative as a time series, so compute it on the same day each month and compare the figures instead of reading one in isolation. Decide beforehand how to treat customers who have already given notice but still pay this month, and keep that rule the same every time. A monthly recurring revenue of 10,000 gives an ARR of 120,000. How do you count annual plans and usage-based fees in your MRR?

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