🚀 SaaS Metrics

Annual Recurring Revenue (ARR) Calculator

Calculate ARR from MRR or annual contracts. Free ARR calculator for US SaaS founders and investors.

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What This Calculator Tells You

Annual recurring revenue (ARR) is the yearly value of the subscription revenue you can expect to repeat. It is the headline number investors use to size and value a SaaS company, and the simplest way to calculate it is monthly recurring revenue × 12.

Enter your current MRR to get ARR. The value of the page is knowing what belongs in that MRR figure — and what does not.

What to Enter

Current MRR ($) — recurring subscription revenue for the latest month: all active plans normalized to a monthly amount, plus recurring add-ons, minus recurring discounts. Leave out one-time setup fees, consulting, usage overages that are not contracted, and refunds.

Worked Examples

1. A self-serve SaaS

MRR at the end of September is $42,500.

Enter 42,500 → ARR $510,000.

2. A company with annual contracts

A customer prepays $12,000 for a year. That is $1,000 of MRR, not $12,000 in the month it was paid.

Normalize every annual or multi-year contract to a monthly figure first, then multiply the total by 12.

3. Separating one-off revenue

A month brings in $60,000 total: $48,000 of subscriptions and a $12,000 implementation fee.

Only the $48,000 counts → ARR $576,000. Including the fee would overstate ARR by $144,000.

How It’s Calculated

ARR = MRR × 12. Or: ARR = Σ (Customers × Annual Contract Value).

ARR: Annual Recurring Revenue
MRR: Monthly Recurring Revenue
Σ: Summation

How to Read Your Result

ARR is a run-rate, not a forecast. It assumes today's subscriptions continue for a full year with no churn or expansion.
$1M ARR is a common milestone for seed-stage SaaS; many Series A rounds happen between $1M and $5M ARR.
Growth rate matters as much as size. Compare this month's ARR with the same month last year to get year-over-year growth.
Next step: calculate MRR from customers and ARPU with the MRR calculator.

Common Mistakes to Avoid

Counting one-time fees. Setup, training and professional-services revenue are not recurring.
Booking annual prepayments as a single month. Spread them across 12 months before calculating MRR.
Including signed-but-not-live contracts. Report contracted ARR (CARR) separately if you track it.
Confusing ARR with revenue. GAAP revenue for the year can be very different from ARR at year-end.

Built and maintained by GenAlpha Tools Editorial. Uses the standard published formula shown above. How we calculate · Report an error

When to Use This Calculator

Report your headline SaaS metric to investors and the board.
Track progress toward ARR milestones like $1M or $10M.
Calculate valuation multiples and burn multiple.
Compare business size consistently across months.

Frequently Asked Questions

How do you calculate ARR?

ARR = MRR × 12, where MRR includes only recurring subscription revenue normalized to a monthly amount.

What is the difference between ARR and revenue?

Revenue is what you actually recognized over a period. ARR is the annualized value of today's recurring subscriptions — a snapshot of run-rate.

Should usage-based revenue be in ARR?

Only the committed or reliably recurring part. Many companies report committed ARR and add usage revenue separately so the headline number is not inflated by one strong month.

Is ARR used for monthly plans?

Yes. Even if every customer pays monthly, ARR is MRR × 12 and is the standard way to describe company size.

Do you store the values I enter?

No. All calculations happen in your browser. Your data never leaves your device.

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