A simple illustration of how MRR and ARR would grow from your current MRR at a steady 5% per month. Shown as an example only, not a forecast; real growth varies with churn and new sales.
Month
MRR
ARR (MRR × 12)
0
$13,740
$164,880
3
$15,906
$190,869
6
$18,413
$220,955
12
$24,675
$296,101
24
$44,313
$531,754
Estimates only — not financial, tax, or professional advice.
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What it calculates: Monthly Recurring Revenue (MRR), Annual Recurring Revenue (ARR), Total Subscribers, Average Revenue Per User (ARPU).
Updated 5 June 2026 · Transparent assumptions
Annual contracts count at a twelfth, and one-offs do not count at all
MRR is the recurring revenue attributable to a month, not the cash collected in it. An annual plan billed upfront contributes a twelfth of its value each month for twelve months; a setup fee, a professional services engagement or a one-time charge contributes nothing, because none of it recurs.
Counting cash as MRR is the most common way the metric gets inflated, and it is self-correcting in the worst way: the month after a big annual prepayment, the number collapses.
The same MRR from ten customers or ten thousand is not the same company
Average revenue per user is MRR divided by customer count, and it separates two businesses that look identical on the top line. High ARPU with few customers means concentration risk and a sales-led motion; low ARPU across many means support load and a product-led one.
Watching ARPU move is more informative than watching it sit. Rising ARPU with flat customers means expansion or a mix shift upmarket; falling ARPU with rising customers usually means the cheapest plan is doing the acquiring.
Annualising assumes nobody leaves
ARR here is simply MRR multiplied by twelve. It is a standard convention and a useful shorthand, but it projects the current month forward unchanged — no churn, no expansion, no seasonality.
For a business with meaningful churn the figure overstates what the next twelve months will actually produce. Pair it with a churn rate before treating it as a forecast rather than a run-rate snapshot.
New, expansion, contraction and churn net out to one number
A flat MRR month can mean nothing happened, or it can mean new business exactly offset cancellations. Those are very different situations, and the total alone cannot distinguish them.
The decomposition that does is new MRR, expansion from existing customers, contraction from downgrades, and churned MRR from cancellations. This calculator gives the snapshot; tracking the four movements between snapshots is what makes the number diagnostic.
Sources & References
Figures on this page are checked against primary, authoritative sources. Links open in a new tab.
Results are estimates for planning and analysis based on the figures you enter. They are not accounting, tax, or financial advice — verify with your own records and a qualified professional before making decisions.
Published the calculator with its formula, worked example, assumptions, limitations and a bespoke guide, and added an automated formula test suite covering it.
Tested MRR as the sum of price times customers across three plans, with ARR and average revenue per user derived from it.
Tested that ARR is always twelve times MRR and that ARPU times the customer count reconstructs MRR exactly.
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