ARR Calculator

Why It Matters

ARR is the headline number most investors and boards ask for first, since a single annualized figure is easier to compare across companies and time periods than a monthly one. It's only as accurate as the MRR it's built from, so it inherits any error from excluding or including one-time revenue incorrectly.

Example

A company has $60,000 in MRR. ARR is $60,000 times 12, which equals $720,000.

Frequently Asked Questions

• Is ARR just a projection?

  It's a current-state annualized snapshot of recurring revenue, not a forecast. It assumes the current MRR holds steady for a year, which is why it moves immediately when MRR changes rather than smoothing out over time.

• Should ARR include expansion revenue already booked?

  Yes, ARR should reflect current MRR including any expansion revenue already in effect, since it's meant to represent the recurring revenue run rate as it stands today.