acalculator

What is my ARR?

Enter your monthly recurring revenue (MRR) to see your annual recurring revenue (ARR). Add the new, expansion, contraction and churned revenue of a period to see how far ARR moved, in monthly or yearly amounts.

Your numbers

Amounts are
ARR
$60,000.00

Your ARR is $60,000.00, from MRR of $5,000.00.

MRR
$5,000.00

ARR: $60,000.00. Your ARR is $60,000.00, from MRR of $5,000.00.

The results are estimates for information only. They are not financial, tax, or legal advice. Check the numbers with your lender or a qualified professional before you decide. Terms of use

How to calculate

Computes annual recurring revenue (ARR) from monthly recurring revenue (MRR × 12), with new, expansion, contraction and churned revenue moving it from a starting figure.

Example with the default inputs (Amounts are Monthly (MRR), Recurring revenue at the start $5,000.00): Your ARR is $60,000.00, from MRR of $5,000.00.

Method: Recurring revenue at the end = revenue at the start + new + expansion − contraction − churn; ARR = MRR × 12 (amounts typed per year are ARR already).

  • Only recurring subscription revenue counts: one-time fees, services and hardware sales are left out.
  • Each subscription is normalized to a month for MRR (a $1,200 yearly plan is $100 of MRR) or to a year for ARR.
  • Arithmetic is exact on the typed decimals; money shows to the cent and growth to 2 decimals, halves up.

Machine-readable copies: Markdown, JSON.

Worked examples

Each example is checked against the calculator on every build.

  1. Amounts are Monthly (MRR), Recurring revenue at the start $5,000.00 gives ARR $60,000.00, MRR $5,000.00.Source: Stripe, "What is ARR, and how do you calculate it?" (ARR = MRR × 12; $5,000 of MRR is $60,000 of ARR; 300 customers × $80 = $24,000 MRR, × 12 = $288,000; starting ARR $250,000 + $45,000 expansion − $30,000 churn = $265,000). https://stripe.com/resources/more/what-is-arr-and-how-do-you-calculate-it: 5,000 × 12 = 60,000
  2. Amounts are Monthly (MRR), Recurring revenue at the start $24,000.00 gives ARR $288,000.00.Source: Stripe, "What is ARR, and how do you calculate it?" (ARR = MRR × 12; $5,000 of MRR is $60,000 of ARR; 300 customers × $80 = $24,000 MRR, × 12 = $288,000; starting ARR $250,000 + $45,000 expansion − $30,000 churn = $265,000). https://stripe.com/resources/more/what-is-arr-and-how-do-you-calculate-it: 300 × 80 = 24,000 MRR
  3. Amounts are Yearly (ARR), Recurring revenue at the start $250,000.00, Expansion $45,000.00, Churn $30,000.00 gives ARR $265,000.00, MRR $22,083.33, Net new ARR $15,000.00, ARR growth 6%.Source: Stripe, "What is ARR, and how do you calculate it?" (ARR = MRR × 12; $5,000 of MRR is $60,000 of ARR; 300 customers × $80 = $24,000 MRR, × 12 = $288,000; starting ARR $250,000 + $45,000 expansion − $30,000 churn = $265,000). https://stripe.com/resources/more/what-is-arr-and-how-do-you-calculate-it: 250,000 + 45,000 − 30,000 = 265,000
  4. Amounts are Monthly (MRR), Recurring revenue at the start $20,000.00, New revenue $2,000.00, Expansion $1,000.00, Contraction $500.00, Churn $1,500.00 gives ARR $252,000.00, MRR $21,000.00, Net new ARR $12,000.00, ARR growth 5%.Source: Stripe Support, "Understanding Monthly Recurring Revenue (MRR) and Annual Recurring Revenue (ARR)" (MRR sums the monthly-normalized amounts of subscriptions; ARR = MRR × 12; MRR moves by new subscriptions, expansion, contractions and churn). https://support.stripe.com/questions/understanding-monthly-recurring-revenue-(mrr)-and-annual-recurring-revenue-(arr)

How it works

Enter amounts per month (MRR) or per year (ARR). With S the recurring revenue at the start, N new revenue, E expansion, C contraction and X churn, all in the same unit:

  • Recurring revenue at the end R = S + N + E − C − X
  • ARR = R × 12 when the amounts are monthly, or R when they are yearly
  • MRR = ARR ÷ 12
  • Net new ARR = (N + E − C − X) × 12 when monthly, or N + E − C − X when yearly
  • ARR growth = (N + E − C − X) ÷ S × 100

Rules:

  • Each amount is $0 or more and at most $1 quadrillion. New revenue, expansion, contraction and churn may be left empty ($0).
  • Net new ARR shows only when you enter at least one of new revenue, expansion, contraction or churn. ARR growth shows then too, but only when the revenue at the start is above $0.
  • Contraction and churn above the revenue at the start plus the new and expansion revenue give no answer: "Contraction and churn are more than the revenue at the start plus the new and expansion revenue."
  • A result too large to show as a number, or not 0 but too small to show, gives no answer with "ARR is too large to show as a number." or "ARR is too small to show as a number.", and the same with "MRR", "Net new ARR" or "ARR growth" in place of "ARR".
  • When more than one rule is broken, the message is the first of: the contraction and churn rule, then ARR, MRR, net new ARR, ARR growth.
  • The arithmetic is exact on the decimals you type. Money shows to the cent and growth to 2 decimals, with halves rounded up (away from 0).

Assumptions

  • Only recurring subscription revenue counts: one-time fees, professional services and hardware sales are left out.
  • Each subscription is normalized to a month for MRR or to a year for ARR before you add it up.

Worked examples by hand

$5,000 of MRR. ARR = 5,000 × 12 = $60,000.

300 customers at $80 a month. MRR = 300 × 80 = $24,000. ARR = 24,000 × 12 = $288,000.

Starting ARR with upgrades and cancellations. Yearly amounts: 250,000 + 45,000 − 30,000 = $265,000 of ARR. Net new ARR = $15,000, growth = 15,000 ÷ 250,000 × 100 = 6%. MRR = 265,000 ÷ 12 = $22,083.33.

A month of MRR movements. MRR at the start $20,000, new $2,000, expansion $1,000, contraction $500, churn $1,500: 20,000 + 2,000 + 1,000 − 500 − 1,500 = $21,000 of MRR. ARR = 21,000 × 12 = $252,000. Net new ARR = 1,000 × 12 = $12,000; growth = 1,000 ÷ 20,000 × 100 = 5%.

Other questions people ask

What is ARR?

ARR, annual recurring revenue, is the yearly value of the subscription revenue a business expects to keep collecting. It counts recurring payments only, at a point in time, and leaves out one-time fees, services and hardware sales.

How do I calculate ARR from MRR?

Multiply the monthly recurring revenue by 12. Stripe gives the example of $5,000 of MRR, which is 5,000 × 12 = $60,000 of ARR.

How is ARR calculated with expansion and churn?

Start from the ARR at the beginning of the period, add new and expansion revenue, and subtract contraction and churned revenue. Stripe’s example: $250,000 + $45,000 of expansion − $30,000 of churn = $265,000 of ARR, a growth of 6%.

How do I count a yearly plan in MRR?

Divide it by 12. A $1,200 yearly subscription adds $100 to MRR and $1,200 to ARR. A plan billed every quarter adds its payment ÷ 3 to MRR, or its payment × 4 to ARR.

How do I get MRR from my customers?

Add up each active subscription’s monthly amount. With every customer on the same plan, multiply the customers by the monthly price: 300 customers at $80 a month is $24,000 of MRR, so ARR is $288,000.

What is the difference between ARR and revenue?

Revenue on the income statement counts everything billed in the year, including one-time setup fees and services. ARR is a snapshot of the recurring part only, so it can be higher or lower than the year's revenue.

Should discounts count in ARR?

Count what customers will pay going forward. A temporary promotional price that will end overstates or understates what you will collect, so use the price customers will keep paying.