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How to calculate Annual recurring revenue (ARR)

The Annual recurring revenue (ARR) formula, with plain worked examples you can check yourself.

Annual recurring revenue (ARR) = MRR × 12

Worked examples

MRR = 9000Annual recurring revenue (ARR) = 108,000
MRR = 3000Annual recurring revenue (ARR) = 36,000
MRR = 8000Annual recurring revenue (ARR) = 96,000

How to use it

  1. Write down the values for each letter in the formula.
  2. Do the brackets first, then divide or multiply.
  3. Check the units before you compare results.
  4. Compare the answer with last period or with a competitor to see if it is good or bad.

This formula belongs to Funding & Growth.

Related terms

RevenueRecurring revenueVenture capitalBurn rateIPOPivot

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