ARR Calculator

Formula

• ARR = MRR × 12
• MRR after n months = MRR × (1 + monthly growth rate)^n
• annualised growth = (1 + monthly growth)^12 − 1
• ARR per customer = ARR ÷ customers

Methodology

ARR is simply MRR annualised. It is not last year's revenue and it is not a forecast — it is what you would collect over the next twelve months if nothing changed. That makes it comparable across companies of very different ages.

Compounding matters more than most founders expect. 6% monthly growth is about 2× a year; 10% monthly is a little over 3×. Because the growth applies to a growing base, the second half of the year contributes far more than the first.

ARR per employee is the efficiency benchmark investors apply: $100k-$150k is typical for early companies, and $200k+ signals a genuinely efficient operation.

These are modelling estimates based on standard SaaS metric definitions. Real results depend on your billing data, contract terms and accounting treatment, so reconcile against your finance system before reporting numbers externally.

Example calculation

1. A company has $10,453 in MRR: ARR = $10,453 × 12 = $125,436.
2. At 6% monthly growth, MRR in twelve months is $10,453 × 1.06^12 = $21,033.
3. That implies about $252,400 of ARR, an annualised growth rate of 101%.
4. Across 12 employees, ARR per employee starts at roughly $10,450.

Frequently asked questions