Revenue Run Rate Calculator

Revenue run rate extrapolates recent revenue into an annualized figure. The revenue run rate formula is period revenue divided by period days, multiplied by 365, which is what this calculator applies. It answers one narrow question: at the daily rate just recorded, what would a full year come to? That makes it a way to describe business size before a full year has closed, and to put periods of unequal length on the same basis.

The loaded figures show the arithmetic. 300,000 over 30 days is 10,000 a day, so the annual run rate is 3,650,000. Change nothing but the period length to 31 days, the length of a calendar month such as July or August, and the same revenue annualises to 3,532,258, about 3.2% lower. The period length is doing as much work as the revenue figure, which is the part most quoted run rates leave out.

Where it distorts, it distorts directionally. For a growing business, run rate understates the year ahead, because it assumes no further growth. For a seasonal one it overstates: December retail revenue annualised describes a year that will not happen. Run rate is also not the same thing as annual recurring revenue, which counts only the subscription base and excludes one-time revenue. This calculator annualises whatever landed in the period, recurring or not.

Run it with sensible defaults

Recent period revenue of 300,000 over 30 days gives a daily figure of 10,000 and an annual run rate of 3,650,000. The same daily figure produces the monthly run rate of 300,000 and the quarterly run rate of 910,000. The defaults are a starting point rather than a benchmark for any particular business.

Those three rows do not reconcile with each other, and the day counts are why. Monthly uses 30 days, quarterly 91, annual 365. Twelve monthly run rates come to 3,600,000 and four quarterly ones to 3,640,000, both short of the 3,650,000 annual figure, because 12 times 30 and 4 times 91 give 360 and 364 days rather than 365. The gaps are 1.4% and 0.3%. Each row is internally consistent; they are three calendar conventions applied to the same daily rate.

The levers in this calculation

The two inputs pull in opposite directions. Revenue scales the result directly, so 1% more revenue is 1% more run rate. Period days sits in the denominator, so 1% more days is about 0.99% less run rate. Stretching the period from 30 days to 30.3 takes the annual figure from 3,650,000 to 3,613,861. The magnitudes are close to equal; the directions are not. Mis-stating the period by a day or two moves the headline figure by several percent.

How the math works

Daily revenue is period revenue divided by period days. The annual run rate is that daily figure times 365, the monthly one times 30, and the quarterly one times 91.

One consequence gets missed. A 30-day month annualises at 365 divided by 30, which is 12.17, not 12. A month of 1,000,000 returns 12,166,667 here, where the common shorthand of multiplying monthly revenue by twelve gives 12,000,000, a difference of 1.4%. Neither is wrong, and they answer slightly different questions, but the gap scales with the figure being quoted. Run rate is not a defined accounting measure either, so an annualised figure is readable only alongside the period it came from.