Annual Recurring Revenue Calculator

Convert subscription contracts into annual recurring revenue, normalising monthly and multi-year terms.

About Annual Recurring Revenue Calculator

ARR annualises every recurring contract regardless of billing term, which is what makes it comparable across companies. One-off fees and professional services are excluded because they do not recur. The share of revenue on annual terms matters as much as the total: annual prepayment funds growth without dilution and materially reduces churn risk.

Formula

Annual Recurring Revenue

ARR = monthly customers × monthly price × 12 + annual customers × annual price

ARR: Recurring revenue normalised to a twelve-month basis

Worked example

With the default values below, Annual Recurring Revenue Calculator returns Total Annual Recurring Revenue of $600,000.00. Change any input above and every figure here is recalculated in your browser.

Inputs used

Customers on monthly plansminimum 0: 400
Average monthly plan priceminimum 0: 100
Customers on annual plansminimum 0: 120
Average annual plan priceminimum 0: 1,000

Results

Total Annual Recurring Revenue: $600,000.00
ARR from Monthly Plans: $480,000.00
ARR from Annual Plans: $120,000.00
Implied Monthly Recurring Revenue: $50,000.00
Share of ARR on Annual Terms: 20.0%

Step by step

1Values used
2Annual Recurring Revenue
3Total Annual Recurring Revenue= 600,000.00
4ARR from Monthly Plans= 480,000.00
5ARR from Annual Plans= 120,000.00
6Implied Monthly Recurring Revenue= 50,000.00
7Share of ARR on Annual Terms= 20.0

Assumptions and limits

The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
In particular, this calculator does not take inflation, tax or fees or charges into account.
Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
This is an estimate for general information and not professional financial, tax or legal advice. See the full disclaimer for the limits that apply to this kind of calculator.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Frequently Asked Questions

How is Annual Recurring Revenue calculated?

ARR = monthly customers × monthly price × 12 + annual customers × annual price ARR annualises every recurring contract regardless of billing term, which is what makes it comparable across companies. One-off fees and professional services are excluded because they do not recur.

Why does Annual Recurring Revenue matter?

The share of revenue on annual terms matters as much as the total: annual prepayment funds growth without dilution and materially reduces churn risk.

What values do I need to enter?

This calculator takes 4 inputs: Customers on monthly plans, Average monthly plan price, Customers on annual plans, Average annual plan price. The pre-filled defaults are a realistic starting point — replace them with figures from your own environment for a result you can act on.