MRR and ARR Calculator
Recurring revenue with growth projection.
Reviewed by the Calculation Machine team · Updated 24 October 2026 · How we check our maths
Your values
ⓘ Live results
- MRR
- $31,980.00
- ARR
- $383,760.00
- MRR in 12 months
- $64,350.04
- Annual prepay cash
- $115,128.00
Quick answer
MRR (monthly recurring revenue) is the number of paying subscribers × their average monthly price, with annual plans counted at one-twelfth of the yearly fee. ARR (annual recurring revenue) is MRR × 12. With 820 subscribers paying an average of $39 a month, MRR is $31,980 and ARR is $383,760; growing 6% a month, MRR would reach about $64,350 in 12 months.
What the MRR and ARR calculator does
This calculator converts a subscriber base into the two numbers every subscription business reports: monthly and annual recurring revenue. It also compounds MRR forward 12 months at a monthly growth rate and shows how much cash arrives up front from customers who prepay for a year.
Founders use it for board updates and fundraising decks, finance teams use it for quick forecasts, and anyone pricing a subscription product can test how price and subscriber count combine. The growth rate is net growth — new and expansion revenue minus churned and downgraded revenue — so pair it with the churn rate calculator to see what is driving it.
MRR counts only recurring subscription charges. One-off setup fees, professional services, usage overages that are not contracted, and refunds are left out. The forecast assumes a constant growth rate, which is rarely true for more than a few months, so treat the 12-month figure as a scenario rather than a prediction.
The formula
MRR = Subscribers × Average monthly price ARR = MRR × 12 MRR in 12 months = MRR × (1 + g)¹² Prepay cash = ARR × annual share
| Symbol | Meaning | Unit |
|---|---|---|
| Subscribers | Paying customers (or seats, if you price per seat) at the measurement date | count |
| Average monthly price | Average recurring charge per subscriber per month, after discounts; annual plans divided by 12 | $ |
| g | Net monthly MRR growth rate as a decimal (6% = 0.06) | — |
| annual share | Fraction of subscribers who pay for a full year in advance | — |
These are the standard SaaS operating metrics; they are not defined by accounting standards. Under ASC 606 and IFRS 15, an annual prepayment is recognized as revenue month by month, which is why MRR spreads it evenly even though the cash arrives at once.
The 12-month forecast compounds growth monthly. For a subscription revenue forecast with churn modeled separately, run the growth rate as new-business growth minus monthly revenue churn.
Worked examples
Early-stage app growing fast
A new SaaS tool with 150 subscribers on a $29 plan, all paying monthly, growing 10% a month.
Inputs
- Subscribers150
- Average monthly price29 $
- Paying annually0 %
- Monthly growth10 %
Result
- MRR$4,350.00
- ARR$52,200.00
- MRR in 12 months$13,652.16
- Annual prepay cash$0.00
MRR of $4,350 becomes about $13,652 in a year if 10% monthly growth holds — more than triple, because 1.1¹² ≈ 3.14. Growth rates this high usually slow as the base gets bigger.
Mature B2B product with many annual contracts
2,400 customers averaging $85 a month, 45% of them prepaying annually, growing 2% a month.
Inputs
- Subscribers2400
- Average monthly price85 $
- Paying annually45 %
- Monthly growth2 %
Result
- MRR$204,000.00
- ARR$2,448,000.00
- MRR in 12 months$258,721.33
- Annual prepay cash$1,101,600.00
ARR is $2.448 million and the annual payers bring in about $1.1 million of cash up front, which funds hiring before the revenue is recognized. Steady 2% monthly growth is roughly 27% a year.
Default: growing subscription business
820 subscribers at $39 a month, 30% on annual plans, 6% monthly growth.
Inputs
- Subscribers820
- Average monthly price39 $
- Paying annually30 %
- Monthly growth6 %
Result
- MRR$31,980.00
- ARR$383,760.00
- MRR in 12 months$64,350.04
- Annual prepay cash$115,128.00
MRR of $31,980 roughly doubles to $64,350 in 12 months, since 1.06¹² ≈ 2.01. A drop to 4% monthly growth would leave the year-end figure far lower, so small changes in the rate matter.
What counts in MRR and what does not
Consistency matters more than the exact policy. Investors will ask how you treat discounts, trials and paused accounts, so write the rules down and apply them every month.
| Item | In MRR? | How to treat it |
|---|---|---|
| Monthly subscription fee | Yes | Count the amount actually charged after discounts |
| Annual or multi-year plan | Yes | Divide the contract value by the number of months |
| One-off setup or onboarding fee | No | Report as non-recurring revenue |
| Free trials | No | Count only once the customer starts paying |
| Committed usage minimum | Yes | Include the contracted minimum, not variable overage |
| Taxes such as VAT or sales tax | No | Exclude; they are collected for the government |
Breaking MRR growth into its parts
A single growth rate hides what is happening underneath. Most subscription businesses track a monthly MRR bridge:
- New MRR from first-time customers.
- Expansion MRR from upgrades, extra seats and price rises.
- Contraction MRR from downgrades.
- Churned MRR from cancellations.
Net new MRR = new + expansion − contraction − churned. Dividing net new MRR by last month's MRR gives the growth rate to enter here. When expansion exceeds contraction plus churn, net revenue retention is above 100% and the business grows even with no new customers.
ARR versus revenue, bookings and cash
ARR is a run-rate: today's recurring revenue extended for a year. It is not the revenue you will report for the year, which depends on when customers joined and left, and it is not cash, which depends on billing terms. Annual prepayments make cash run ahead of revenue; monthly billing keeps them close together. Use ARR to describe scale, the forecast to plan, and a cash-flow model — together with your burn rate — to decide how long the money lasts.
How to use the MRR and ARR Calculator
- 1Enter the number of paying subscribers today, excluding free trials and free plans.
- 2Enter the average monthly price; for annual plans, divide the yearly price by 12 before averaging.
- 3Enter the percentage of subscribers who prepay annually to see up-front cash.
- 4Enter net monthly MRR growth (new plus expansion minus churn and downgrades) and read MRR, ARR and the 12-month projection.
Frequently asked questions
How do you calculate MRR?
Add up the monthly recurring charges of all paying customers, converting annual plans to a monthly figure by dividing by 12. Equivalently, multiply subscriber count by average monthly revenue per subscriber.
What is the difference between MRR and ARR?
They measure the same recurring revenue over different periods: ARR is MRR × 12. Businesses with mostly monthly plans tend to quote MRR; those selling annual contracts usually quote ARR.
Do annual subscriptions count toward MRR?
Yes, at one-twelfth of the annual price each month. Booking the whole payment in the month it is received would create a misleading spike.
What is a good monthly MRR growth rate?
There is no universal benchmark; growth rates tend to fall as revenue grows. As a reference, 5% a month compounds to about 80% a year and 10% a month to more than 200%.
How does churn affect ARR?
Churned revenue is subtracted from MRR, and ARR falls by 12 times that amount. Use the customer lifetime value calculator to see what churn does to the value of each customer.
References
- ASC 606, Revenue from Contracts with Customers — Financial Accounting Standards Board (FASB)
- IFRS 15 Revenue from Contracts with Customers — IFRS Foundation
About this calculator
- Built and reviewed by the Calculation Machine team · How we build and test calculators
- Last reviewed: October 24, 2026
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