Free calculator
ARR Calculator
Enter Current MRR and Expected net monthly growth — every figure updates as you type. Nothing you type leaves your browser.
How do you calculate ARR?
ARR
$510,000
Current run rate: MRR × 12.
- ARR in 12 months
- $816,526Run rate after twelve months of compounding at the rate above.
- Net new ARR added
- $306,526The difference between the two run rates.
- Average net new MRR per month
- $2,129What that projection asks you to add every month, on average.
Results are rounded for display; the calculation runs at full precision.
The maths
How ARR is calculated
The formula this calculator runs, written out so you can check it against your own model rather than trust a black box.
ARR = MRR × 12- MRR
- Monthly-normalised value of every active paid subscription, less active discounts.
- × 12
- A static annualisation of today's book. It assumes no growth and no churn — which is why ARR is a run rate rather than a projection.
Reading the result
What the number is telling you
Bands are directional, not verdicts. Stage, price point and contract length move every one of them, so treat these as a starting point for the conversation rather than a grade.
- Under 100k ARR
- Pre-traction by most definitions. The run rate is dominated by a handful of accounts, so losing one moves it by a visible percentage. Judge progress by whether acquisition repeats without founder heroics, not by the annualised figure.
- 100k – 1M ARR
- Early traction. This is the band where retention starts to determine whether growth compounds or treads water, and where a clean set of metric definitions pays for itself. Investors at this stage will ask for MRR and growth rate rather than ARR.
- 1M – 10M ARR
- Scaling. Expansion revenue and net revenue retention now matter as much as new business — at this size, retained and expanded accounts typically fund a large share of growth. Segment the run rate by cohort and plan before drawing conclusions from the total.
- Over 10M ARR
- The run rate is a reporting convention rather than a decision tool. Committed contract value, cohort retention curves and quick ratio describe the business more accurately, and reconciliation between billing, analytics and the general ledger becomes a standing monthly process.
ARR is a run rate, not a forecast
Multiplying MRR by twelve does not predict next year. It states what the current book would produce if every subscription renewed unchanged and you never signed another customer. That is a useful reference point precisely because it contains no assumptions — which is also why quoting it as a forecast is misleading.
The projection field above makes the assumption explicit. Notice how much work a few percentage points of monthly growth does once it compounds twelve times: the gap between the two figures is the entire plan for the year, and the average net new MRR line is the monthly bill for delivering it.
Do not annualise anything that is not recurring
The most common way to overstate ARR is to annualise revenue that will not repeat: implementation fees, one-off professional services, usage overages from a single unusual month, or a pilot with no renewal commitment. Each of these is real revenue and none of them belongs in a run rate. Multiplying a good month by twelve is not the same thing as having an annual business.
The second most common way is annualising a month that happened to contain a large annual renewal. Normalise to MRR first, then multiply. Never compute ARR from a single month's cash collections.
When ARR is the wrong metric
If most of your customers pay monthly and churn is meaningful, ARR systematically overstates what you will actually collect — it charges you nothing for the customers who will leave in month three. Businesses with short contracts and high churn are better described by MRR plus net revenue retention, which prices the leakage in. ARR earns its place when contracts are genuinely annual and renewal is the norm.
Related: ARR defined, MRR calculator, and forecasting wired to live billing data.
Definition
Where ARR gets argued about
A calculator settles the arithmetic, not the definition — and the definition is where most disagreements about this number actually live. The glossary entry covers the conventions, the edge cases and how Bastle handles each one.
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MRR Calculator
Monthly Recurring Revenue is the monthly-normalised value of every active paid subscription: monthly plans at face value, quarterly plans divided by three, annual plans divided by twelve, less active discounts.
Learn moreARPU Calculator
Average Revenue Per User is Monthly Recurring Revenue divided by the number of active paying customers.
Learn moreNet Revenue Retention Calculator
Net Revenue Retention measures what happened to the revenue of a fixed group of existing customers over a period: starting MRR plus expansion, less contraction and churn, divided by starting MRR.
Learn moreSaaS Quick Ratio Calculator
The SaaS quick ratio divides the MRR you gained — new, expansion and reactivation — by the MRR you lost to contraction and churn.
Learn moreFrequently asked questions
What is the difference between ARR and annual revenue?
Can I calculate ARR if my customers pay monthly?
Should ARR include one-off and professional services revenue?
How do investors verify an ARR figure?
Does ARR include usage-based revenue?
Stop recalculating ARR by hand.
Connect Stripe and Bastle keeps ARR current — backfilled to your first customer, segmentable, and traceable to the invoices behind it. Free while in beta, no card required.