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MRR and ARR Calculator

Normalize recurring subscription revenue into MRR and ARR without mixing in one-time services or unearned contract value.

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Use one period and currency consistently. Change any value to recalculate.

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Results

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What this calculator measures

Monthly recurring revenue represents normalized recurring subscription revenue for one month. Annual recurring revenue is commonly calculated as MRR multiplied by twelve. Neither metric is the same as cash collected, recognized accounting revenue or the total value of every signed contract.

This calculator starts with customer count and average monthly subscription price, then adds recurring add-ons and subtracts recurring discounts. Keep implementation fees and other one-time revenue outside the model.

How to use the MRR and ARR Calculator

  1. Enter active subscription customers and average monthly price.
  2. Add recurring add-ons and subtract recurring discounts for the month.
  3. Review normalized MRR, ARR and average revenue per account.
MRR = customers × monthly price + recurring add-ons − recurring discounts

ARR is MRR multiplied by twelve. ARPA divides MRR by active customer accounts.

Worked example

Five hundred customers at $80 a month plus $5,000 recurring add-ons and $3,000 discounts produce $42,000 MRR and $504,000 ARR.

Assumptions and limitations

  • Exclude setup, consulting and other non-recurring revenue.
  • Annual contracts should be normalized to a monthly recurring amount.
  • ARR is a run-rate metric and not a revenue forecast or accounting statement.
  • Define active accounts consistently across reporting periods.

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