ARR Results
Calculated from the values entered below.
ARR Inputs
Detailed Calculation Breakdown
| Metric | Formula | Result |
|---|---|---|
| ARR from MRR | MRR × 12 | USD 120,000.00 |
| Subscription ARR | Customers × Avg. Monthly Subscription × 12 | USD 120,000.00 |
| Net New ARR | New + Expansion − Contraction − Churn | USD 12,000.00 |
| Ending ARR | Starting ARR + Net New ARR | USD 112,000.00 |
| ARR Growth % | (Ending − Starting) ÷ Starting × 100 | 12.00% |
Scenario Results
| Scenario | MRR | ARR |
|---|---|---|
| A | USD 10,000.00 | USD 120,000.00 |
| B | USD 11,000.00 | USD 132,000.00 |
| C | USD 12,500.00 | USD 150,000.00 |
Formula Used
ARR = MRR × 12
Net New ARR = New ARR + Expansion ARR − Contraction ARR − Churned ARR
Ending ARR = Starting ARR + Net New ARR
ARR Growth % = ((Ending ARR − Starting ARR) ÷ Starting ARR) × 100
How to Use This ARR Calculator
Enter monthly recurring revenue first. Add customer count and average monthly subscription value when you want a second ARR estimate based on customer economics. Then enter starting ARR, new ARR, expansion ARR, contraction ARR, and churned ARR. Choose the preferred currency and decimal precision. The results section above the form shows annual recurring revenue, net new ARR, ending ARR, growth, churn impact, and expansion rate. Use the scenario fields to compare three possible MRR levels. When finished, export the data as CSV, create a PDF report, print the page, or copy the main results.
Why ARR Matters
Annual recurring revenue is a core SaaS metric because it converts predictable subscription income into a yearly value. It helps founders, finance teams, and investors compare recurring performance across periods. ARR is especially useful when contracts renew regularly and revenue is reasonably predictable. New ARR shows fresh business added during a period. Expansion ARR measures upgrades or increased usage from existing customers. Contraction ARR captures downgrades, while churned ARR represents recurring revenue lost from cancellations.
Interpreting Growth and Churn
ARR growth should be reviewed together with churn and expansion. Strong new sales can hide high customer losses, so the net new ARR formula gives a clearer view of movement. A positive ending ARR means the company added more recurring value than it lost. Expansion is also important because healthy SaaS businesses often increase revenue from retained customers. Churn impact shows how much starting ARR disappeared during the period. Use scenario comparisons for forecasting, budgeting, board reporting, and target setting. This calculator gives a practical snapshot, but it should still be paired with cohort analysis, retention metrics, contract details, and recognized revenue rules for complete financial planning.
Sample ARR Data
| MRR | ARR | Example Use |
|---|---|---|
| $5,000 | $60,000 | Early-stage subscription product |
| $25,000 | $300,000 | Growing SaaS business |
| $100,000 | $1,200,000 | Established recurring revenue operation |
| $500,000 | $6,000,000 | Scaled software business |
Frequently Asked Questions
What is ARR?
ARR means Annual Recurring Revenue. It estimates predictable recurring subscription revenue over one year.
How is ARR calculated from MRR?
Multiply monthly recurring revenue by 12. For example, $10,000 MRR equals $120,000 ARR.
What is Net New ARR?
Net New ARR combines new and expansion revenue, then subtracts contraction and churned recurring revenue.
Should one-time revenue be included?
No. ARR generally focuses on recurring contractual or subscription revenue rather than one-time charges.
How does churn affect ARR?
Churn reduces recurring revenue when customers cancel or recurring contracts end without renewal.
Can ARR be used for forecasts?
Yes. ARR scenarios are useful for planning, though forecasts should also consider churn, pricing, and customer growth.