ARR Calculator
Convert monthly recurring revenue to annual (ARR).
Results update as you type.
How it works
ARR, annual recurring revenue, is the yearly value of a subscription business's predictable revenue, and this calculator finds it from your monthly recurring revenue. You enter your MRR, the total recurring subscription revenue you earn in a month, and it multiplies by twelve to give your ARR. ARR is the headline metric for SaaS and subscription companies because it captures the stable, repeatable income that underpins valuation and planning, stripping out one-off payments that do not recur. It represents a run rate: what you would earn over a year if nothing changed from today's monthly subscriptions. Investors and boards focus on ARR because its predictability makes revenue forecastable and the business easier to value, often at a multiple of ARR. Growth in ARR, driven by new customers, expansion within existing accounts, and reduced churn, is the primary goal of most subscription businesses. Because ARR is simply MRR times twelve, keeping MRR accurate is essential: include only truly recurring revenue, exclude setup fees and usage overages that are not contractually recurring, and account for discounts. For businesses billed annually, ARR can be summed directly from annual contract values. Enter your monthly recurring revenue to compute your annual recurring revenue.
ARR = MRR × 12
Annual recurring revenue equals monthly recurring revenue multiplied by twelve. It projects the predictable, subscription-based revenue a business would earn over a year at its current monthly run rate. Only recurring revenue counts; one-time fees, setup charges, and variable usage outside the subscription are excluded so the figure reflects dependable, repeatable income.
Source:SaaS metrics
We review all our tools from time to time to ensure accuracy.
Worked example
How to use this calculator
- 1
Enter your values
Enter monthly recurring revenue (mrr).
- 2
Adjust the options
Fine-tune any options to match your situation.
- 3
Read your result
Annual recurring revenue updates instantly as you type — no button to press.
Frequently asked questions
What is annual recurring revenue?
Annual recurring revenue, or ARR, is the yearly value of the predictable, subscription-based revenue a business earns. It equals monthly recurring revenue times twelve and represents the run rate of dependable income, excluding one-time charges. ARR is the leading metric for SaaS and subscription companies, central to forecasting, planning, and valuation.
How do you calculate ARR?
Multiply your monthly recurring revenue by twelve. If your MRR is ten thousand dollars, your ARR is one hundred twenty thousand dollars. Only include revenue that genuinely recurs each month; exclude setup fees, one-off charges, and non-recurring usage so the ARR reflects reliable subscription income, which this calculator does automatically.
What counts as recurring revenue?
Recurring revenue is income you can reliably expect each billing cycle, typically from subscriptions or ongoing contracts. It excludes one-time setup fees, professional services, and variable usage charges that are not contractually guaranteed. Counting only true recurring revenue keeps ARR meaningful as a measure of predictable, repeatable income rather than a mix of stable and one-off amounts.
Why do investors care about ARR?
ARR measures predictable, repeatable revenue, which makes a business easier to forecast and value. Subscription companies are often valued as a multiple of ARR, so growing it directly raises company worth. Its stability and visibility into future revenue reduce risk, which is why investors and boards track ARR and its growth rate closely.
What is the difference between ARR and revenue?
Total revenue includes everything a business earns, including one-time sales, services, and variable charges, while ARR counts only recurring subscription revenue on an annualised basis. ARR is usually lower than total revenue because it excludes non-recurring income, but it is more predictable and is the preferred metric for gauging the health of a subscription model.