This ARR calculator helps subscription-based businesses, e-commerce sellers, and entrepreneurs track predictable annual recurring revenue. It breaks down income from monthly, quarterly, and annual billing cycles for clear financial planning. Use it to set sales targets, report to stakeholders, and assess business growth.
Calculate annual recurring revenue for your subscription business
How to Use This Tool
Enter the number of active recurring subscription plans you offer in each billing cycle (monthly, quarterly, annual).
Add the average revenue you earn per plan for each billing cycle, then include any monthly churn revenue (optional).
Select your local currency from the dropdown menu, then click Calculate ARR to see your results.
Use the Reset button to clear all fields and start a new calculation.
Formula and Logic
ARR (Annual Recurring Revenue) is calculated by annualizing all active recurring revenue streams and subtracting annualized churn:
- Total Monthly Recurring Revenue (MRR) = Active Monthly Plans × Avg. Monthly Revenue per Plan
- Total Quarterly Recurring Revenue (QRR) = Active Quarterly Plans × Avg. Quarterly Revenue per Plan
- Total Annual Plan Revenue = Active Annual Plans × Avg. Annual Revenue per Plan
- Gross ARR = (MRR × 12) + (QRR × 4) + Total Annual Plan Revenue
- Annualized Churn = Monthly Churn Revenue × 12
- Net ARR = Gross ARR - Annualized Churn
Practical Notes
For e-commerce and SaaS businesses, ARR only includes recurring revenue from active subscriptions, not one-time purchases or setup fees.
Churn revenue refers to recurring revenue lost from canceled subscriptions each month; exclude one-time refunds from this field.
Benchmark ARR growth rates vary by industry: SaaS startups often target 50-100% year-over-year growth, while mature businesses aim for 10-20%.
Use Net ARR to assess true growth after accounting for customer losses, which is more accurate for stakeholder reporting than Gross ARR.
Why This Tool Is Useful
Small business owners and entrepreneurs use ARR to set annual sales targets and track progress toward revenue goals.
Investors and stakeholders often request ARR figures to assess the stability and growth potential of subscription-based businesses.
Marketing and sales teams use ARR breakdowns to identify high-performing plan tiers and adjust pricing strategies.
E-commerce sellers with recurring subscription models (e.g., monthly boxes) use this tool to forecast annual cash flow.
Frequently Asked Questions
Does ARR include one-time setup fees?
No, ARR only accounts for recurring revenue from active subscriptions. One-time fees like setup costs or individual product purchases should be excluded from all input fields.
How do I calculate churn revenue?
Churn revenue is the total recurring revenue lost from canceled subscriptions in a single month. For example, if 5 monthly plans at $50 each cancel, monthly churn revenue is $250.
What’s the difference between Gross and Net ARR?
Gross ARR is the total annualized recurring revenue from all active plans. Net ARR subtracts annualized churn revenue, giving a more accurate picture of revenue growth after customer losses.
Additional Guidance
Update your ARR calculation monthly to track changes in plan adoption, pricing adjustments, and churn rates.
If you offer discounts on recurring plans, use the average revenue per plan after discounts are applied to get an accurate ARR figure.
For businesses with multiple subscription products, calculate ARR for each product separately then sum the results for total company ARR.
Always use consistent currency values across all input fields to avoid miscalculations.