MRR & ARR Calculator
Build MRR and ARR from your customer count and average revenue per account, then project forward at a monthly growth rate.
How it works
MRR = customers × ARPA (monthly) · ARR = MRR × 12 · Projected MRR = MRR × (1 + monthly growth)¹²
Monthly recurring revenue is your customer count times the average monthly revenue per account, and annual recurring revenue is simply MRR times twelve. Because recurring revenue compounds, a steady monthly growth rate is applied twelve times to project a year ahead — 5% a month compounds to roughly 80% over a year, not 60%. Normalize annual or usage-based plans to a monthly figure before using them here.
Worked example
500 customers paying $40 a month gives $20,000 MRR and $240,000 ARR. Growing 5% a month, MRR compounds to 20,000 × 1.05¹² ≈ $35,917 after a year — an ARR near $431,000.
Frequently asked questions
What is the difference between MRR and ARR?
MRR is monthly recurring revenue; ARR is annual recurring revenue, equal to MRR × 12. ARR is typically used by companies on annual contracts, MRR by those billing monthly, but they describe the same recurring revenue at different time scales.
How do I handle annual plans in MRR?
Normalize them to a monthly value: divide an annual contract by 12 before adding it to MRR. Counting a full annual payment as one month’s MRR would badly overstate the figure.
Why does growth compound instead of just adding up?
Each month’s growth applies to the new, larger base, so gains build on prior gains. That is why 5% monthly growth produces about 80% over a year rather than 5% × 12 = 60%.
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Educational estimate, not financial advice.