Annual Recurring Revenue Calculator
Net New ARR
$0
Ending ARR
$0
Stop Guessing: Instantly Calculate Your SaaS Business's Predictable Revenue
Understanding the financial health of your subscription business feels complicated. You have revenue from new customers, upgrades, downgrades, and cancellations all happening at once. How do you get a clear, stable picture of your company's growth? The key is Annual Recurring Revenue (ARR).
ARR is a critical SaaS metric that shows you the predictable revenue you can expect from all your active subscriptions over a 12-month period. It smooths out daily fluctuations and gives you a powerful baseline for financial forecasting, valuation, and strategic planning.
How to Use the ARR Calculator
Our calculator simplifies this essential calculation. It breaks ARR down into its core components so you can see exactly what's driving your growth—or holding you back.
- Beginning ARR: Enter the ARR you started with at the beginning of the period (e.g., the start of the year or quarter).
- New Business ARR: This is the annualized revenue from brand-new customers you acquired during the period.
- Expansion ARR (Upgrades): Input the additional annualized revenue from existing customers who upgraded their plans or purchased add-ons. This is a key driver of healthy growth and high net revenue retention.
- Downgrade ARR: The annualized revenue you lost from customers who downgraded to a cheaper plan.
- Churned ARR: This represents the annualized revenue lost from customers who cancelled their subscriptions entirely. Managing customer churn is vital for sustainable growth.
Once you input your numbers, the calculator instantly shows your Net New ARR (the net change for the period) and your final Ending ARR.
Frequently Asked Questions (FAQs)
What's the difference between ARR and MRR?
ARR (Annual Recurring Revenue) is your predictable revenue over a year, while MRR (Monthly Recurring Revenue) is the same metric calculated for a single month. For a quick estimate, you can calculate ARR by multiplying your MRR by 12.
Why shouldn't I include one-time fees in ARR?
ARR is designed to measure predictable, recurring revenue. Including one-time setup fees, consulting charges, or variable usage fees would inflate the number and give you an inaccurate picture of your company's stable, long-term financial health.
What is Net New ARR?
Net New ARR is the total change in your annual recurring revenue over a specific period. It’s calculated by adding new business and expansion revenue and then subtracting revenue lost from downgrades and churn. It shows your true growth momentum.
Can a company have negative Net New ARR?
Yes. If the revenue you lose from customer churn and downgrades is greater than the revenue you gain from new customers and upgrades, your Net New ARR will be negative. This indicates that your business is losing recurring revenue.
How is ARR used in a business valuation?
Investors use ARR as a primary indicator of a SaaS company's health and scalability. A strong, growing ARR often leads to a higher valuation because it demonstrates a stable and predictable revenue stream, which is less risky than non-recurring revenue models.
What is a good ARR growth rate?
A "good" rate depends on your company's stage. Early-stage startups might aim for 100%+ year-over-year growth. For more established companies, a growth rate between 20-50% is often considered strong and sustainable, showing consistent market traction and customer value.