What is the difference between ARR and revenue?
ARR is a run rate: current recurring revenue projected forward twelve months. Revenue is what you earned in a period, including everything that does not recur. They are rarely the same number.
ARR Calculator
Annual recurring revenue from your MRR, or from customers and ARPA, with the net new figure underneath it.
Enter your monthly recurring revenue, or the customers and ARPA behind it. Add new MRR and churn and the tool shows the direction as well as the size.
Everything here is worked out in your browser. Nothing you type is sent anywhere, and there is no account to make.
Leave blank and fill in customers and ARPA instead, if that is what you have.
Per month. Used only when MRR is left blank.
Optional. New and expansion recurring revenue added this month.
%
Optional. Gives net new MRR and what churn costs across a year.
Result
The numbers below are an example so the tool opens working. Replace them with yours.
How the number is worked out
- ARR counts subscriptions only. One off setup fees, professional services and usage overages are revenue, and they are not recurring, so putting them in overstates a number investors read as a run rate.
- ARR shows your current recurring run rate. Net new MRR shows whether it increased or decreased this month. A business can hold a large ARR while its recurring base shrinks, which is why both appear here.
What comes out
You will see
- ARR, monthly recurring revenue times twelve
- MRR, worked out from customers and ARPA when you leave it blank
- ARPA, when you enter a customer count
- Net new MRR and net new ARR, when you enter new business or churn
- Revenue churned this month and what it costs across a year
- A warning when churn is larger than new business
How to use it
Three steps, and the third one is the point
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Enter MRR, or what it is made of
Monthly recurring revenue if you have it. Customers and average revenue per account if you do not, and the tool works out the rest.
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Count subscriptions only
Leave one-time revenue out because it will not repeat next year.
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Add new MRR and churn
This is the part that matters. ARR is a snapshot; net new MRR is the direction, and it can be negative while the ARR still looks large.
What ARR counts, and what does not belong in it
Annual recurring revenue is monthly recurring revenue times twelve. It is a run rate rather than a historical figure: what the next year holds if nothing changes.
Only recurring revenue belongs in ARR. A subscription recurs. A setup fee does not, professional services do not, and a usage overage that happened once does not. All three are real revenue and none of them belongs in a run rate.
ARR is a snapshot, net new MRR is the direction
ARR moves too slowly to reveal a shrinking base before churn has been running for months.
Net new MRR is new and expansion revenue minus what churned. It is the line that says whether the base is growing this month, and check it when ARR remains high but monthly recurring revenue is declining.
The tool also shows what a steady churn rate costs across a year, before any growth. On a 42,000 MRR, a 2.4% monthly churn is about 12,000 of ARR gone annually just to stand still.
The tool
What this one does
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Works from MRR or from its parts
Give it MRR, or give it customers and ARPA and let it work out the MRR first.
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Shows the direction, not just the size
Net new MRR and net new ARR sit under the headline, because a snapshot on its own hides a shrinking base.
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Prices the churn
What churned this month, and what that rate costs across a year before any growth is added.
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Says when the base is shrinking
Churn larger than new business gets named rather than left in a negative number somebody has to notice.
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States what belongs in ARR
The result carries the definition, because the most common error here is including revenue that does not recur.
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Gives you ARPA
Average revenue per account per month, from the MRR and the customer count you already entered.
Reading the result
What each line is telling you
- ARR
- A run rate: what the next twelve months hold if nothing changes. Not what you earned last year.
- Net new MRR
- New and expansion minus churn. The line that says whether the base is growing.
- ARPA
- Average revenue per account, per month. Moves with pricing, packaging and mix.
- ARR lost per year at this rate
- What a steady monthly churn costs across a year. It is the size of the hole growth has to fill before it adds anything.
The calculation is only the start
of the diagnosis.
We look at your search visibility across Google and the answer engines, and tell you what is costing you orders. No charge for the first look.
In practice
What you can do with it
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Sanity check a run rate before a meeting
Take out anything that does not recur and see what is left. That is the number to present.
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See what churn is costing
The annual figure makes the full financial impact of monthly churn easier to see.
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Work out what a price rise is worth
Enter customers and the new ARPA. Then subtract the customers the rise would cost you and run it again.
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Compare growth against retention
If net new MRR is small while new MRR is large, the work is in keeping customers rather than in finding them.
Questions
ARR Calculator questions
Should setup fees be in ARR?
No. A setup fee is charged once, so it is not recurring. Including it makes the run rate promise money that will not arrive again next year.
What about annual contracts?
Divide the contract by twelve to get its MRR contribution, then multiply back up. Counting the whole contract in the month it was signed makes MRR jump and then collapse.
Is revenue churn the same as customer churn?
No, and the gap is informative. Losing your smallest accounts and losing your largest one can be the same customer churn and very different revenue churn. This calculator uses revenue churn.
Can net new MRR be negative while ARR grows?
Not for long. ARR is a snapshot of the current base, so a negative month lowers it. A large recurring base can keep ARR looking healthy while churn erodes it, which this tool shows.
Is my data sent anywhere?
No. Everything is worked out in your browser, with no account and nothing uploaded.
The rest of the set
Fifteen more, all free, all in the browser
- CPM Calculator Work out what a thousand impressions costs, or what a budget buys at a given CPM.
- CTR Calculator Clickthrough rate from clicks and impressions, or the impressions a target needs.
- Conversion Rate Calculator Conversion rate from visitors and conversions, with revenue per visitor beside it.
- ROAS Calculator Return on ad spend, the ACoS behind it, and whether your margin leaves any profit.
- CPC Calculator What one click costs, and what it costs by the time it becomes an order.
- CPA Calculator Cost per acquisition from media spend, and the ceiling your margin allows.
- CAC Calculator What winning a customer really costs, including the parts a platform cannot see.
- AOV Calculator Average order value, and what a target is worth against the same order count.
- Cost Per Lead Calculator What an enquiry costs, and what it costs once the unqualified half is priced in.
- llms.txt Generator Build an llms.txt file that tells AI crawlers which pages on your store matter.
- LTV Calculator Work out what a customer is worth over time, so you know what you can pay to win one.
- Schema Markup Generator Generate the JSON-LD a product, article or FAQ page needs, ready to paste.
- Break-even ROAS Find the return on ad spend where a campaign stops costing you money.
- CRO ROI Calculator See what a conversion rate change is worth against the traffic you already have.
- Hreflang Generator Produce the hreflang tags a multi-country store needs, without the usual mistakes.
Annual recurring revenue projects your current recurring revenue over twelve months. It does not predict future customer changes. It counts what is contracted today and says nothing about who is already deciding to leave, which is why churn belongs next to it.
Where this comes up