Mr Calcu | Instantly calculate ARR to uncover growth potential and make smarter revenue decisions.

Quickly calculate your Annual Recurring Revenue (ARR) with precision. Empower your financial strategy and gain peace of mind with our expert-built tool.

Annual Recurring Revenue (ARR) Calculator Description

What is Annual Recurring Revenue (ARR)?

Annual Recurring Revenue (ARR) is a critical business metric that reflects predictable, subscription-based revenue on an annual basis. It’s essential for SaaS companies, membership models, and other recurring billing systems.

Why ARR Matters

• It helps forecast future revenue with greater accuracy.
• It reflects customer retention and long-term value.
• It is often used in investor and valuation discussions.

ARR Formula

ARR = (MRR × 12) + Annual Upgrades - Annual Downgrades - Annual Churn

Key Adjustments

• Upgrades: Include any additional recurring revenue from customers moving to higher-tier plans.
• Downgrades: Deduct lost recurring revenue from customers switching to lower plans.
• Churn: Subtract revenue from customers who cancel entirely.
• Annual Plans: Include the full contract value (excluding one-time fees).

Example Calculation

Customer A pays $100/month → ARR = 100 × 12 = $1,200

Case Study 1: B2B SaaS Startup

This company has:

• 50 customers at $300/month
• 10 enterprise customers at $1,000/month
• 5 annual cancellations worth $300/month

MRR = (50 × 300) + (10 × 1000) = 25,000
Annual Churn = 5 × 300 = 1,500
ARR = (25,000 × 12) - 1,500 = $298,500

Case Study 2: Mixed Billing Content Platform

Details:

• 200 monthly subscribers at $15
• 100 annual subscribers at $150
• 20 users downgraded from $20 → $10/month

ARR from monthly = 200 × 15 × 12 = 36,000
ARR from annual = 100 × 150 = 15,000
Downgrade loss = 20 × ($20 - $10) × 12 = 2,400
Total ARR = 36,000 + 15,000 - 2,400 = $48,600

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