Businesssaas
MRR and ARR Calculator
MRR and ARR from a mix of monthly and annual contracts. Annual deals are normalised to a monthly rate rather than counted when they are billed.
Also called: monthly recurring revenue calculator, arr calculator.
MRR
₹7,00,000
₹7,00,000 of monthly recurring revenue, ₹84,00,000 annualised, across 120 customers, an ARPA of ₹5,833.
ARR
₹84,00,000
Average revenue per account
₹5,833
Method and background
How this is calculated
Annual contracts divided by twelve and added to the monthly-billed revenue. Counting a year of revenue in the month it was invoiced is the single most common way MRR gets misstated, and it produces a chart with spikes that look like growth.
mrr = monthly + annual/12; arr = mrr * 12- M
- Monthly-billed recurring revenue (currency)
- A
- Annual contract value (currency)
Frequently asked questions
- Is ARR just MRR times twelve?
- That is the standard convention, and it is a run rate rather than a forecast: it states what the next twelve months would bring if nothing changed. Nothing ever stays unchanged, so ARR quoted as though it were revenue earned is a projection wearing an accounting label.
- How should annual contracts be counted in MRR?
- Divide the contract value by twelve for MRR regardless of when it was billed. Recognising the whole amount in the month it was invoiced makes MRR spike and then collapse, which describes cash timing rather than the subscription base.