ARR Calculator
Translate between monthly and annual recurring revenue with live updates.
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ARR
$300,000.00
MRR equivalent
$25,000.00
What this means
ARR annualizes recurring revenue. Use consistent MRR definitions so ARR doesn’t mix in one-time sales.
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ARR Summary
ARR ≈ MRR × 12. Use ARR when talking yearly scale; use MRR when managing month-to-month changes.
Explanation
ARR is the annualized recurring revenue figure.
MRR equivalent is ARR ÷ 12 (or the MRR you entered).
Business implication: investors often frame growth in ARR—know both views of the same subscription base.
Step-by-step example
MRR $25,000:
- ARR: $25,000 × 12 = $300,000
Formula
ARR = MRR × 12
MRR = ARR ÷ 12
Helpful tips
- Keep a single source of truth for MRR so ARR never drifts from ops reporting.
- Don’t annualize one-time revenue—it inflates ARR and misleads planning.
FAQ
What is ARR?
Annual recurring revenue is the yearly value of recurring subscription revenue—commonly MRR × 12 for monthly-normalized SaaS.
Is ARR the same as trailing twelve-month revenue?
Not always. ARR is a forward-looking run-rate of recurring contracts. Trailing revenue includes history and often non-recurring items.
How should annual prepaid deals be counted?
Include the annual contract value in ARR, and recognize the monthly slice in MRR consistently so MRR × 12 still aligns.
How accurate is this calculator?
It applies the standard ×12 relationship. Multi-year discounts and usage revenue may need separate treatment.
Related tools
Key terms
ARR
Definition. Annual recurring revenue—subscription revenue expressed on an annualized basis.
In simple terms. ARR is often MRR × 12 (with consistent definitions). Investors and SaaS operators use it to talk about scale without monthly noise.
ARR ≈ MRR × 12 (when definitions align)
Example. $8,000 MRR → about $96,000 ARR.
Common mistake. Annualizing non-recurring revenue or inconsistent MRR definitions.
Related calculators. ARR Calculator, MRR Calculator
Related terms. MRR, LTV, LTV:CAC ratio
MRR
Definition. Monthly recurring revenue—normalized subscription revenue you expect every month.
In simple terms. MRR smooths annual and monthly plans into a monthly run-rate so growth and churn are easier to compare. One-time setup fees usually are not MRR.
MRR ≈ sum of normalized monthly subscription amounts
Example. Ten customers on $50/month and two on $600/year ($50/month each) → $600 MRR.
Common mistake. Mixing one-time revenue into MRR or forgetting to normalize annual plans.
Related calculators. MRR Calculator, ARR Calculator
LTV:CAC ratio
Definition. How customer lifetime value compares to what it costs to acquire that customer.
In simple terms. A higher ratio generally means acquisition is more efficient—though “good” targets depend on margins, payback period, and growth stage. It is a directional health check, not a law.
LTV:CAC = LTV ÷ CAC
Example. LTV $800 and CAC $200 → 4:1 LTV:CAC.
Common mistake. Optimizing the ratio by under-investing in growth, or comparing ratios built with different LTV definitions.
Related calculators. LTV:CAC Ratio Calculator, LTV Calculator, CAC Calculator
Notes & Assumptions
ARR is a core SaaS board and fundraising metric derived from recurring revenue run-rate.
Last reviewed: July 2026