Your ARR is $237,600, the recurring revenue you can expect over a full year at today's customer count and pricing. At 20% growth, next year's ARR projects to $285,120. ARR should count only recurring subscription revenue, not one-time setup or services fees.
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ARR, or annual recurring revenue, is the predictable subscription revenue your business earns across a full year. The formula is short: ARR equals MRR times 12, where MRR is your number of paying customers multiplied by their average monthly price. The calculator above runs that math instantly and projects next year's ARR from your growth rate.
Start with MRR. Multiply your active paying customers by their average monthly price, then multiply that by twelve. With 200 customers paying $99 a month, MRR is $19,800 and ARR is $237,600. ARR per customer in that example is $1,188, which is just the monthly price times twelve.
The one rule that trips people up: only count revenue that recurs. A one-time setup fee, an onboarding charge or a one-off professional services invoice does not belong in ARR, because ARR is meant to describe revenue you can count on next year too. If a customer pays $99 a month plus a $500 setup fee, only the $99 feeds your ARR. Mixing in one-time money inflates the number and breaks the comparison that makes ARR useful in the first place.
ARR and MRR measure the same thing on different time scales, so the choice is about audience and cadence. MRR is the operating metric. It reacts quickly to churn, new signups and price changes, so product and growth teams watch it week to week to spot trends early. A single bad churn month shows up in MRR immediately.
ARR is the planning and reporting metric. Boards, investors and finance teams talk in ARR because it smooths out monthly noise and frames the business at annual scale, which is the unit valuations and budgets are built on. A useful habit is to track MRR internally for momentum and report ARR externally for the headline. If most of your contracts are annual, ARR also maps more naturally to how revenue actually lands.
Three levers move ARR, and the strongest programs work all three. Retention comes first, because a leaky bucket caps everything above it: keeping the customers you already have protects the base ARR you have already earned. New logos add fresh recurring revenue, and expansion, upsells and seat growth inside existing accounts, often delivers the cheapest growth you will find because the trust is already there.
The quiet multiplier under all three is your acquisition channel. Paid pipeline stops the moment you stop spending, but organic search compounds: the content and authority you build keep bringing in qualified SaaS buyers month after month at a falling cost per signup. That is the part of the ARR engine most teams underinvest in, and it is exactly the work we do. If you want a pipeline that feeds new-logo ARR without scaling ad spend, request a free SEO audit and we will map the organic opportunity against your real market.
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