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SaaS ARR Calculator

Estimate your software company's annual recurring revenue from active customers, average monthly subscription value, churn and expansion growth.

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Overview

A SaaS ARR calculator helps you estimate annual recurring revenue using your current customer base, average monthly revenue per customer, expected churn, expansion and new monthly recurring revenue. It is useful for understanding recurring revenue scale and planning growth targets.

How it works

The calculator first estimates current MRR by multiplying active customers by average monthly revenue per customer, then annualizes that amount to get gross ARR. It applies a simplified net revenue retention rate using annual churn and annual expansion to estimate adjusted ARR. Finally, it annualizes your expected new monthly recurring revenue and adds it to adjusted ARR to produce a projected ARR figure.

How to use this calculator

  1. 1Enter your current number of active paying customers.
  2. 2Add your average monthly revenue per customer.
  3. 3Enter the annual churn rate you want to model.
  4. 4Enter the annual expansion rate from upgrades or account growth.
  5. 5Add the new monthly recurring revenue you expect to bring in.
  6. 6Review your gross ARR, adjusted ARR and projected ARR.

Example Calculation

Active customers

200

Average monthly revenue per customer

$150

Annual churn rate

8%

Annual expansion rate

12%

New monthly recurring revenue

$5,000

Projected ARR

$434,400

With 200 active customers paying an average of $150 per month, gross ARR is about $360,000. With 8% churn and 12% expansion, adjusted ARR is about $374,400, and adding $5,000 in new MRR per month gives a projected ARR of about $434,400.

Frequently asked questions

What does this SaaS ARR calculator estimate?

It estimates annual recurring revenue based on your current customers, average monthly subscription revenue, churn, expansion and new monthly recurring revenue.

What is ARR in SaaS?

ARR stands for annual recurring revenue. It is the yearly value of recurring subscription revenue, excluding most one-time charges.

How is ARR different from MRR?

MRR is monthly recurring revenue, while ARR is the annualized version. A simple conversion is ARR = MRR × 12.

Does this calculator include churn and expansion?

Yes. It uses a simplified retention model that adjusts gross ARR by annual churn and annual expansion before adding new ARR from sales.

Should one-time setup fees be included in ARR?

Usually no. ARR typically focuses on recurring subscription revenue rather than one-off fees or services.

Can I use this for forecasting?

Yes, for a simple estimate. For detailed forecasting, you may want to model contractions, seasonality, pricing changes and cohort behavior separately.

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Assumptions and warnings

Assumptions

  • This calculator assumes subscription revenue is recurring and can be annualized from monthly revenue.
  • Churn and expansion are applied as simplified annual percentage adjustments to current ARR.
  • New monthly recurring revenue is annualized using a typical monthly run rate.
  • Results are estimates and do not include one-time fees, implementation charges, taxes or refunds.

Warnings

  • This calculator provides an estimate only and should not be treated as accounting or financial advice.
  • Actual ARR reporting may vary depending on how your business defines churn, expansion, contractions and recognized revenue.