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Updated 2026-08-08 · SaaS & Subscription · Educational use only ·
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ARR Calculator

Annual recurring revenue today and projected forward.

Calculate current ARR from monthly recurring revenue and project it forward at a monthly growth rate over a horizon you choose.

What this tool does

This calculator takes a current monthly recurring revenue figure and projects it forward at a constant monthly growth rate. It reports annual recurring revenue today, which is the monthly figure multiplied by twelve, and what that annualised figure reaches at the horizon entered. The headline result depends on the monthly revenue alone; the growth rate and the horizon drive the forward projection beneath it. The calculation holds the growth rate constant for every month of the period and changes nothing else. It does not account for seasonality, churn, pricing changes, or market conditions, and the projection is one illustrative path rather than a forecast.

Quick answer: with the default values, the result is $600,000.00 (Current ARR). Adjust the values below for your own figures.

Enter Values

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Formula Used
Current monthly recurring revenue
Monthly growth rate, as the percentage entered
Months projected forward
That growth rate as a decimal: the percentage divided by 100

Disclaimer

Results are estimates for educational purposes only. They do not constitute financial advice. Consult a qualified professional before making financial decisions.

Annual recurring revenue is monthly recurring revenue multiplied by twelve, with a forward projection that compounds a monthly growth rate on top. It is widely quoted for subscription businesses because it annualises the revenue currently on subscription. Investors, analysts and acquirers commonly describe SaaS businesses in ARR terms.

The sample figures on this page

On the sample figures used on this page, 50,000 of monthly revenue is 600,000 of ARR today. Compounding at 10% a month, monthly revenue reaches about 157,000 after twelve months, which annualises to about 1.88 million. That is a multiple of 3.14 over the year, a pace associated with early-stage companies rather than mature ones.

Which inputs matter most

The headline moves one-for-one with monthly revenue and is untouched by the other two inputs: a 1% change in monthly revenue moves current ARR by exactly 1%, while the growth rate and the horizon leave it unchanged. That one holds at any revenue level and in any currency. Both of the others drive the forward figure instead. Neither is affected by the revenue level or the currency, but the size of each depends on the rate entered. From the 10% in the sample figures, raising the monthly growth rate by one percentage point lifts the twelve-month projection by about 11.5%, and lowering it by one point cuts the projection by about 10.4%; the size of both moves shrinks as the starting rate rises. One extra month multiplies the projection by one further growth step, which is 10% at the rate entered, and one month fewer divides it by that same step, which is a fall of about 9.1%.

What the model assumes

The model holds the monthly growth rate constant for every month of the horizon. It assumes no churn, no seasonality, no pricing change, and no one-time revenue entering or leaving the base. Growth is applied to the whole book each month rather than to new and existing customers separately, so a business whose expansion revenue and churn roughly offset will track the projection more closely than one where either dominates.

What ARR leaves out

ARR has limits. It excludes one-time revenue such as setup fees and professional services, which can understate short-term cash. Contracted ARR, which nets known churn out of signed contracts, is a tighter figure where contract visibility allows it.

Example Scenario

$50,000 of monthly recurring revenue is $600,000.00 of ARR today. The projection at 10% monthly growth is reported separately as ARR in 12 months.

Inputs

Current MRR:$50,000
Monthly Growth:10%
Months Forward:12
Expected Result$600,000.00
Expected Result breakdown
ARR in 12 months$1,883,057.03
ARR Added$1,283,057.03
Future MRR$156,921.42
Growth Multiple Over Horizon3.14x

This example uses sample figures for illustration. Adjust the inputs above to match a specific situation and see how the result changes.

Sources & Methodology

Methodology

This calculator computes annual recurring revenue by taking monthly recurring revenue and projecting it forward. It applies the compound growth formula, where future monthly revenue equals current monthly revenue multiplied by one plus the monthly growth rate as a decimal, raised to the number of months specified. Annual recurring revenue is then that monthly figure multiplied by twelve. The headline result is current ARR, which depends on the monthly revenue alone; the growth rate and horizon drive the forward figure and the growth multiple reported alongside it. The model assumes a constant monthly growth rate applied uniformly across all periods, with no variation or interruption. It does not account for seasonality, customer churn, pricing changes, fees, or the timing of revenue recognition. A non-positive monthly revenue returns a message instead of a result. Results represent a theoretical projection under steady-state growth conditions.

Frequently Asked Questions

Does ARR include one-time fees?
No. ARR is purely recurring subscription revenue. Setup fees, professional services, and one-time charges are reported separately, often as services revenue. Including one-time items in ARR inflates the recurring base.
How does ARR differ from revenue?
Revenue and ARR measure different things. Revenue is what accrues in a period. ARR annualises what is currently under subscription. A customer paying 1,200 up front for a year contributes 1,200 of cash on day one, but under accrual recognition only 100 of revenue a month, and it carries 100 of MRR and 1,200 of ARR for as long as the subscription runs.
How the Rule of 40 combines growth and margin
A commonly cited benchmark adds the growth rate to the profit margin and looks for a total of 40 or more. It is a way of saying that growth and profitability trade off against each other rather than being judged separately, so a company growing fast while losing money and one growing slowly while profitable can reach the same total. The benchmark is a convention rather than a threshold with a formal basis, and the mix that suits a business depends on its stage and its funding position.
Why do investors focus on ARR?
Predictability. A subscription book that largely renews gives a known starting point for the next year before any new sales are counted, which is why subscription businesses are commonly valued on a multiple of ARR where others are valued on a multiple of revenue. The multiples themselves vary widely with growth rate, retention and market conditions.
Why doesn't the headline change when the growth rate moves?
The headline is current ARR, which is the monthly revenue multiplied by twelve and nothing else. The growth rate and the horizon describe where the revenue goes next, so they drive the forward figure, the amount added and the growth multiple, and leave today's annualised figure alone. Changing the growth rate and watching current ARR hold still is the model behaving correctly rather than a fault.
What does the growth multiple show?
It is the future monthly revenue divided by the current monthly revenue, so it states how many times over the book grows across the horizon. At 10% a month over twelve months it reads 3.14x, because 1.1 compounded twelve times is 3.1384. Because it is a ratio it carries no currency and reads the same everywhere, and a figure below 1.00x means the book contracted over the period.

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