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.

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Annual Recurring Revenue (ARR)
ARR per Quarter
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ARR
ARR per Quarter
Daily Revenue
Professional Full parameters & maximum detail
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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

  1. Enter MRR to instantly get ARR (MRR × 12).
  2. Use From ACV tab for contract-based billing.
  3. Use Multi-Year Contracts tab to separate TCV from ARR.
  4. 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)
  1. SaaS Metrics Guide — ChartMogul — ChartMogul
  2. ARR Definition — ProfitWell — ProfitWell
  3. SaaS Benchmarks Report — OpenView Partners — OpenView Partners
  4. SaaStr ARR Guide — SaaStr
  5. Bessemer Cloud Index — SaaS Metrics — Bessemer Venture Partners