ARR calculator

How ARR is calculated

ARR (annual recurring revenue) is recurring revenue stated for a year. For a subscription business that bills monthly, it is simply:

ARR = MRR x 12

If you sell yearly contracts instead, ARR is the sum of the yearly value of every active contract. The calculator adds both, so a product with $2,000 MRR from monthly plans and $6,000 in yearly contracts has $24,000 + $6,000 = $30,000 ARR. One-time fees and services are left out. The ARR glossary entry covers the edge cases.

The 12 month projection

The projection grows MRR by your monthly growth rate and takes off your monthly churn, once a month for 12 months, then multiplies by 12. With $2,500 MRR, 8% growth and 3% churn, MRR grows by about 5% a month and ends near $4,490, so ARR a year out is about $53,900.

It is compounding, so small changes in the rate move the result a lot. Treat it as a direction, not a forecast. Growth rarely holds steady for a year.

ARR or MRR on your page?

Early on, MRR is the clearer number: it moves every month and people know how to read it. ARR is what investors and larger customers expect once contracts are yearly. Whichever you share, say which it is. On makerhandle the figure comes straight from Stripe with a check mark, see verified revenue, and the MRR calculator helps when you have a mix of plans.