ARR Calculator — Annual Recurring Revenue

ARR (Annual Recurring Revenue) is the annualised value of all recurring subscriptions. Simple formula: ARR = MRR × 12. For mixed annual and monthly plans: ARR = (sum of all monthly plan values × 12) + (sum of all annual plan values). Do not include one-time fees, setup charges, or non-recurring revenue.

ARR counts only recurring, contractual revenue normalised to a year. Total revenue includes one-time charges, professional services, and usage overages. ARR is predictable; total revenue fluctuates. Investors value ARR because it represents committed future revenue. A company with ₹1Cr ARR will likely collect close to ₹1Cr in the next 12 months (barring churn).

ARR is preferred when: most contracts are annual (enterprise SaaS), reporting to investors (ARR multiples are standard for valuations), planning annual budgets and hiring. MRR is better for: month-to-month subscriptions, tracking short-term momentum, and calculating burn rate. Most SaaS companies track both.