Convert monthly recurring revenue to annual recurring revenue, and project where your MRR and ARR land after a year of compounding growth.
MRR → ARR
$
%
ARR
$600.0K
MRR in 12 months
$125.9K
Implied ARR in 12mo
$1.51M
What are MRR and ARR?
MRR (monthly recurring revenue) is the predictable subscription revenue you earn each month. ARR (annual recurring revenue) is the same thing annualised. Together they are the core metrics of any subscription business and the foundation of most SaaS valuations.
How to convert MRR to ARR
ARR = MRR × 12
That’s it — ARR is just your current monthly recurring revenue run-rate multiplied by twelve. $50,000 MRR = $600,000 ARR.
Projecting growth
MRR in 12 months = Current MRR × (1 + monthly growth)¹²
The calculator also compounds your monthly growth rate over a year, so you can see where steady growth would take your MRR and ARR. Real growth is lumpier, so treat the projection as directional.
What counts as recurring revenue?
Include: monthly and annual subscription fees, committed recurring contracts.
Exclude: one-time setup or implementation fees, professional services, and non-contracted usage — none of these recur reliably.
ARR is a run-rate, not booked revenue. It projects your current MRR forward 12 months, so for a growing startup it will usually be higher than the revenue actually recognised over the trailing year.
Frequently asked questions
How do you convert MRR to ARR?
Multiply monthly recurring revenue by 12: ARR = MRR × 12. A company with $50,000 in MRR has $600,000 in ARR. ARR is simply the annualised run-rate of your current monthly recurring revenue — it is not the same as revenue actually booked over the last 12 months.
What is MRR?
Monthly recurring revenue (MRR) is the predictable subscription revenue a business earns each month. It counts only recurring subscription revenue — not one-off fees, setup charges or usage overages that don’t repeat.
What is ARR?
Annual recurring revenue (ARR) is the annualised value of your recurring revenue — MRR × 12. It’s the standard headline metric for subscription businesses and the basis most SaaS valuations are built on.
What counts as recurring revenue?
Only revenue that repeats predictably on a subscription: monthly or annual plan fees and committed recurring contracts. Exclude one-time implementation fees, professional services, and variable usage that isn’t contracted, since these don’t recur reliably.
Is ARR the same as annual revenue?
No. ARR is a run-rate — your current MRR projected forward 12 months. Actual annual revenue (GAAP revenue) is what you really booked over a past year, and includes non-recurring items. A fast-growing startup’s ARR is usually higher than its trailing annual revenue.