What is the ARR formula?

The basic ARR formula is: ARR = MRR × 12. For a more comprehensive calculation, use: ARR = (Total Subscription Revenue + Recurring Add-on Revenue) × 12. To calculate Net New ARR, use: Net New ARR = New ARR + Expansion ARR - Churned ARR - Contraction ARR.

How do I calculate ARR from MRR?

To convert MRR to ARR, simply multiply your Monthly Recurring Revenue by 12. For example, if your MRR is $50,000, your ARR is $600,000. Our calculator handles this automatically and also factors in expansion and churn for a more accurate picture.

What's the difference between ARR and revenue?

ARR (Annual Recurring Revenue) only includes predictable, recurring subscription revenue normalized to a one-year period. It excludes one-time fees, professional services, and non-recurring charges. Total revenue includes everything your company earns.

What is a good ARR growth rate?

ARR growth benchmarks vary by stage: Seed-stage companies often grow 200-300%+ annually, Series A companies typically target 100-200%, and Series B+ companies aim for 50-100%. The 'Triple Triple Double Double Double' framework suggests tripling ARR twice, then doubling three times to reach $100M ARR.

How do I calculate Net New ARR?

Net New ARR = New ARR (from new customers) + Expansion ARR (upsells, cross-sells) - Churned ARR (lost customers) - Contraction ARR (downgrades). This formula shows your true ARR momentum and is what investors focus on most.

Should I include annual contracts paid monthly in ARR?

Yes, if a customer commits to an annual contract but pays monthly, include the full annual value in your ARR. ARR measures committed recurring revenue, not cash collection timing. However, month-to-month contracts without annual commitment should use MRR × 12.

ARR Calculator

Calculate your ARR instantly with our free calculator. Get the formula, benchmark against 500+ SaaS companies, and unlock AI-powered growth recommendations.

Enter Your Values

Monthly Recurring Revenue (MRR)*

Your total recurring revenue collected monthly. Include all subscription tiers.

New ARR

ARR from brand new customers acquired during the period

Expansion ARR

Additional ARR from existing customers (upsells, cross-sells, price increases)

Churned ARR

ARR lost from customers who cancelled completely

Contraction ARR

ARR lost from customers who downgraded but did not cancel

ARR 12 Months Ago

Your ARR from the same period last year (for growth rate calculation)

Formula

ARR = MRR × 12 | Net New ARR = New ARR + Expansion ARR - Churned ARR - Contraction ARR

ARR normalizes your recurring revenue to an annual basis, giving investors and operators a standardized metric to measure SaaS business health. Net New ARR shows your growth momentum by breaking down the components driving ARR changes.

Annual Recurring Revenue (ARR)$600,000

$600K ARR — solid traction, focus on scaling.

Net New ARR$0

ARR Growth Rate Benchmarks by Stage

ShrinkingNegative growth — urgent action needed

< -$0

Below Median0-50% YoY — typical for mature or struggling companies

$0 – $50

Healthy (Series B+)50-100% YoY — on track for Series B+ companies

$50 – $100

Strong (Series A)100-200% YoY — target for Series A companies

$100 – $200

Exceptional (Seed)200%+ YoY — hypergrowth, typical at Seed stage

> $200

Source: SaaS Capital & OpenView SaaS Benchmarks 2024

How to Calculate ARR

Enter your Monthly Recurring Revenue (MRR) or subscription data
Add expansion and churn ARR components for Net New ARR
Optionally enter your ARR from 12 months ago for growth rate calculation
Review your ARR, growth rate, and health score
Get AI-powered recommendations to accelerate growth

SaaS ARR Benchmarks by Stage

$1.5M - $2M

Median ARR at Series A

$5M - $8M

Median ARR at Series B

150%+ YoY

Top quartile ARR growth (Series A)

120%+ (best-in-class)

Net Revenue Retention benchmark

30-50% (healthy)

Expansion ARR % of New ARR

24-36 months

Time to $1M ARR (median)