Irish Calculators
Business

Annual Recurring Revenue (ARR) Calculator

Convert current recurring revenue into an annual run-rate from MRR or contract details. Avoid counting the same contracts twice; churn, expansion and future discounts are not forecast.

Runs privately in your browserMethod reviewed

Your numbers

Each row: recurring charge per contract,months covered by that charge,number of contracts. Include each contract once; no headers.
Your figures stay on this device.

How the calculation works

Annualise recurring revenue from a monthly recurring total or a list of recurring contract charges. ARR is a current run-rate measure under the supplied billing assumptions, rather than a record of cash collected over the past year.

ARR = MRR × 12. Contract-mode ARR = sum(recurring charge / months covered × 12 × contract count).

  1. Identify recurring components

    Separate recurring subscriptions or service charges from one-off receipts. The calculator uses the supplied categorisation and does not decide whether contract terms qualify as recurring.

  2. Normalise contract intervals

    For each contract row, divide recurring charge by months covered and multiply by contract count. Sum the monthly equivalents to establish MRR.

  3. Annualise the run rate

    Multiply MRR by twelve. This expresses the current recurring base over a year without assuming growth, cancellations, upgrades or contract renewals beyond those inputs.

Worked example: MRR run rate

Sample inputs demonstrate the method. They are not a forecast or product offer.

The first example starts with MRR of €10,000. Multiplying that monthly base by twelve gives ARR of €120,000. This holds the recurring base constant; it does not forecast new customers or churn.

Recurring revenue input
Monthly recurring revenue
Monthly recurring revenue
10000

Expected result

Annual recurring revenue
€120,000.00
Worked example: Mixed billing periods

Sample inputs demonstrate the method. They are not a forecast or product offer.

Recurring revenue input
Contract rows
Recurring contract amounts
1200,12,10 100,1,20

Expected result

Annual recurring revenue
€36,000.00
Monthly recurring equivalent
€3,000.00

Understanding your result

ARR is useful for comparing a recurring revenue base on a common annual scale. It is not necessarily accounting revenue recognised in the year, invoiced bookings or bank receipts.

A contract billed annually can contribute to monthly recurring revenue after normalisation. Its annual invoice amount must not be treated as a monthly charge and annualised again.

Questions you might have

Can I add annual contracts to MRR × 12?

Only if those contracts are not already represented in MRR. Contract mode is available to annualise the full list without that overlap.

Choosing the right inputs

Recurring revenue input
Use MRR mode when a consistent monthly recurring total is already available. Contract mode converts each supplied billing interval to its monthly equivalent first.
Monthly recurring revenue
Include recurring revenue only, excluding one-off setup or implementation fees. Use the recurring base you want to annualise, with a consistent currency and tax basis.
Recurring contract amounts
Enter charge,months covered,contract count on each row. The charge is for the stated interval, not automatically a monthly amount; omit headings and thousands separators.

Common mistakes to avoid

  • Do not include one-time fees simply because they appeared on a subscription invoice.
  • Do not add a contract list to an MRR total that already includes those same contracts.

Assumptions to check

  • Use amounts in one currency and one reporting period. Results are labelled EUR; the arithmetic also works for another consistent currency.
  • Contracts already represented in MRR must not be added a second time. Future churn, expansion and discounts are not projected.

Sources and method

Read our calculation and testing approach.