Annual Recurring Revenue Calculator
Estimate your annual recurring revenue from active customers, average revenue per account and expected churn.
Overview
This Annual Recurring Revenue Calculator helps you estimate current ARR and projected ARR over the next 12 months using your active customers, average monthly revenue, expected churn, new customer adds and expansion rate. It is useful for subscription businesses that want a quick view of recurring revenue momentum.
How it works
The calculator starts by estimating current monthly recurring revenue from active customers multiplied by average monthly revenue per customer. It then annualizes that figure to show current ARR. To project future ARR, it estimates monthly revenue lost from churn, added from new customers and gained from expansion, then applies the net monthly change across a 12-month period. The result is a simplified ARR projection rather than a full cohort-based forecast.
How to use this calculator
- 1Enter your current number of active paying customers.
- 2Add the average monthly revenue per customer or account.
- 3Enter your expected monthly churn rate.
- 4Enter the average number of new customers you add each month.
- 5Add your expected monthly expansion rate and review the ARR results.
Example Calculation
Active customers
100
Average monthly revenue per customer
$100
Monthly churn rate
2%
New customers per month
10
Monthly expansion rate
1%
Current annualized ARR
$120,000
With 100 active customers paying an average of 100 per month, current annualized ARR is about 120000. With 2% monthly churn, 10 new customers per month and 1% monthly expansion, projected ARR after 12 months is about 249600.
Frequently asked questions
What does this calculator estimate?
It estimates your current annualized recurring revenue and a simple 12-month ARR projection based on customer count, average monthly revenue, churn, new customers and expansion.
What is the difference between MRR and ARR?
MRR is monthly recurring revenue, while ARR is the annualized value of recurring revenue. ARR is usually calculated as MRR multiplied by 12.
Does this calculator include one-time revenue?
No. It is designed for recurring subscription revenue only and excludes one-time sales, setup fees and other non-recurring income.
How is churn used in the calculation?
The calculator applies your monthly churn rate as an average percentage of starting recurring revenue and starting customers to estimate monthly losses.
What is expansion rate?
Expansion rate is the average monthly increase in recurring revenue from existing customers through upgrades, add-ons or pricing increases.
Is this suitable for SaaS businesses?
Yes. It is especially useful for SaaS and other subscription-based businesses that track recurring revenue by customer or account.
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Assumptions and warnings
Assumptions
- This calculator assumes average monthly revenue per customer stays broadly consistent unless reflected in the expansion rate.
- Churn, new customer additions and expansion are applied as simple monthly averages.
- Results are estimates and do not include one-time revenue, refunds, failed payments or taxes.
- The projection uses a simplified 12-month model and does not replace detailed revenue forecasting.
Warnings
- This calculator provides an estimate only and should not be used as financial advice.
- Actual recurring revenue may differ due to seasonality, pricing changes, contract terms and customer behavior.