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Written by MetricKit EditorialReviewed by MetricKit Editorial ReviewUpdated 2026-05-09
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ARR Calculator

Estimate Annual Recurring Revenue (ARR) from customers and ARPA.

ARR (Annual Recurring Revenue) is MRR annualized (MRR x 12). It is an annualized run-rate snapshot, not a promise of yearly revenue.

When people compare bookings vs ARR, remember: bookings measure contracted value, while ARR measures recurring run-rate. Cash receipts can differ again due to prepay timing.

Prefer an explanation- Read the guide.
Need definitions- Browse the glossary.
ARR guide: meaning, formula, MRR, bookings, and growthARR growth rate: how to measure recurring momentumARR vs MRR: definitions, formulas, and how to convertBookings vs ARR: definitions, formulas, and examples
 
 
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Tip: you can type commas (e.g., 10,000).

Example

Using the default inputs, the result is:
$600,000.00
Paying customers
250
ARPA per month
$200
Target customers (optional)
0
Target ARR (optional)
$0

How to calculate

  1. Estimate ARPA per month for your segment (monthly revenue per account).
  2. Count paying customers (or subscriptions).
  3. Compute MRR = customers x ARPA.
  4. Compute ARR = MRR x 12.
  5. Optional: add targets to back-solve required customers or ARPA.

Formula

ARR = MRR x 12
  • Assumes revenue stays stable for a year.

FAQ

ARR vs annual revenue-
ARR is recurring revenue on an annualized basis. It doesn't include one-time fees or services revenue.
Bookings vs ARR-
ARR is recurring run-rate (MRR x 12). Bookings are contracted value and can include one-time and non-recurring items. Cash receipts can differ again due to prepay timing.

Common mistakes

  • Counting one-time fees or services revenue as recurring run-rate.
  • Annualizing a short-term MRR spike without checking churn/retention.
  • Mixing bookings and cash receipts into ARR reporting.

How to interpret

ARR notes
  • ARR is an annualized snapshot, not a guarantee of yearly revenue.
  • For annual plans, ARR may lag behind bookings and cash.
  • Use ARR for comparing scale across SaaS businesses.

Related calculators

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Calculate fully-loaded CAC by including paid spend plus sales & marketing costs (salaries, tools, and other acquisition costs).
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LTV Calculator
Estimate customer Lifetime Value (LTV) using ARPA, gross margin, and churn rate.
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LTV Sensitivity Calculator
See how gross profit LTV changes as churn and gross margin vary (simple 3x3 sensitivity).
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LTV:CAC Calculator
Compute LTV:CAC ratio and CAC payback using ARPA, gross margin, churn, and CAC.
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CAC Payback Period Calculator
Estimate how many months it takes to recover CAC (months to recover CAC) using gross profit.

Quick checks

  • Keep time units consistent (monthly vs annual) across inputs and outputs.
  • Segment by cohort/channel/plan before trusting a blended average.
  • Use the related guide to avoid common definition and denominator mismatches.