ARR Calculator
The ARR Calculator determines your Annual Recurring Revenue, the total predictable revenue from subscriptions over a year. ARR is the standard metric used by investors and analysts to value subscription businesses.
How to Use the ARR Calculator
Interactive calculator available after JavaScript loads.
Loading calculator...
Math & Finance Experts — Verified Formulas, Peer-Reviewed Sources, Expert Analysis
Looking for a deeper explanation?
Read our comprehensive, peer-reviewed educational article in our Blog to learn the underlying math, formulas, and step-by-step examples.
Mathematical Formula & Logic
Step-by-Step Worked Calculation
Scenario: Calculating ARR from MRR
A SaaS company has $50,000 in MRR.
Step 1: MRR = $50,000.
Step 2: ARR = $50,000 × 12.
Step 3: ARR = $600,000.
Step 4: The company generates $600,000 in annual recurring revenue.
How to Use the ARR Calculator
- 1. Enter your current MRR (Monthly Recurring Revenue).
- 2. Or input all subscription plans and customer counts.
- 3. The calculator computes your ARR.
- 4. Use for valuation and growth projections.
What Is a ARR Calculator?
ARR (Annual Recurring Revenue) represents the total predictable revenue from subscriptions over a 12-month period. It is the standard metric for valuing subscription businesses.
Why This Calculation Matters
ARR provides a clear annual picture of business performance and is used by investors, analysts, and management for valuation, forecasting, and strategic planning.
Common Mistakes to Avoid
- Confusing ARR with total revenue — ARR only includes recurring subscription revenue
- Not accounting for currency fluctuations in international ARR
- Including one-time setup fees in ARR
- Not adjusting for contract length differences
Frequently Asked Questions
Complete indexable directory of answers (6 questions)
What is ARR?
ARR (Annual Recurring Revenue) is the total predictable revenue generated from subscriptions over a 12-month period. It is calculated as MRR × 12.
How do investors use ARR?
Investors use ARR to determine company valuation, typically applying a multiple based on growth rate. Higher ARR growth rates command higher valuation multiples.
What is net new ARR?
Net new ARR is the change in ARR from one period to the next, accounting for new customer revenue, expansion revenue, contraction, and churn.
How does the ARR Calculator calculate its results?
The ARR Calculator uses verified mathematical formulas processed entirely in your browser. Calculator inputs and results are never sent to external servers. We do use Google Analytics and AdSense for standard website operation — see our Privacy Policy for details.
Is my data safe when using this ARR Calculator?
Yes. All calculations happen locally in your browser. We never store, transmit, or log any input data you enter into the calculator.
What should I do if I get an unexpected result?
Double-check that all inputs are valid numbers within reasonable ranges. If you believe there is an error, please contact us with your input values and we will investigate.