ARR Calculator
Calculate Annual Recurring Revenue (ARR) from MRR, ACV, or multi-year contracts. Includes net ARR retention, ARR growth rate, Magic Number, and Rule of 40 for SaaS businesses.
$
Annual Recurring Revenue (ARR)
—
ARR per Quarter —
Daily Revenue —
Extended More scenarios, charts & detailed breakdown ▾
$
ARR
—
ARR per Quarter —
Daily Revenue —
Professional Full parameters & maximum detail ▾
$
$
$
$
$
$
%
ARR Movement
Ending ARR —
Net New ARR —
Net ARR Retention Rate —
ARR Growth Rate —
SaaS Health Metrics
Magic Number —
Rule of 40 Score —
How to Use This Calculator
- Enter MRR to instantly get ARR (MRR × 12).
- Use From ACV tab for contract-based billing.
- Use Multi-Year Contracts tab to separate TCV from ARR.
- Switch to Professional for ARR movement waterfall, net retention, Magic Number, and Rule of 40.
Formula
ARR = MRR × 12 | ARR = ACV × Customers
Magic Number = Net New ARR / S&M Spend
Rule of 40 = ARR Growth % + EBITDA %
Example
Example: MRR $24,500 → ARR = $294,000. Net new ARR $50K on $50K S&M spend → Magic Number = 1.0.
Frequently Asked Questions
- Annual Recurring Revenue (ARR) is the annualized value of recurring subscription revenue. Simple formula: ARR = MRR × 12. For ACV-based billing: ARR = ACV × Number of Customers.
- ARR is the annualized value of a contract (revenue recognized each year). TCV (Total Contract Value) is the total value of a multi-year deal. A 3-year $36,000 contract has TCV = $36,000 and ARR = $12,000.
- Net ARR Retention = (Starting ARR + Expansion − Churn − Contraction) / Starting ARR × 100%. Above 100% means expansion revenue outpaces churn — a key indicator of product-market fit.
- Magic Number = Net New ARR / Sales & Marketing Spend. A score above 0.75 indicates efficient growth. Above 1.0 is excellent and suggests scaling up sales investment.
- Rule of 40 = ARR Growth Rate % + EBITDA Margin %. A score of 40 or above is considered healthy for SaaS. It balances growth against profitability — fast-growing companies can have negative EBITDA if growth rate exceeds 40%.
Related Calculators
Sources & References (5) ▾
- SaaS Metrics Guide — ChartMogul — ChartMogul
- ARR Definition — ProfitWell — ProfitWell
- SaaS Benchmarks Report — OpenView Partners — OpenView Partners
- SaaStr ARR Guide — SaaStr
- Bessemer Cloud Index — SaaS Metrics — Bessemer Venture Partners