Result
ARR
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This calculation is for informational purposes only and does not replace advice from a qualified professional. Formulas and rates may not fit your exact situation — double-check the figures before making decisions.
How it is calculated
ARR = MRR × 12. This simply annualizes monthly recurring revenue — the metric is handy for investors and for comparing against a company's annual figures (annual revenue, annual budget), while MRR is better for tracking month-to-month momentum.
ARR isn't a forecast of annual revenue — it's a snapshot of the current monthly revenue times 12: it doesn't account for future growth, churn or seasonality, it just shows what the company would earn in a year if MRR stayed flat.
The metric only makes sense for a business with mostly recurring (subscription) revenue. If a large share of revenue comes from one-off sales or project contracts, ARR will distort the real picture — in that case it's better to look at revenue directly.