• MRR is the average monthly recurring revenue ($) • EC is the number of customers ## How to Calculate Annual Recurring Revenue? The following example problems outline how to calculate Annual Recurring Revenue. Example Problem #1: 1. First, determine the average monthly recurring revenue ($). In this example, the average monthly recurring revenue ($) is given as 174. 2. Next, determine the number of customers. For this problem, the number of customers is given as 90. 3. Finally, calculate the Annual Recurring Revenue using the equation above: ARR = MRR * #C *12 The values given above are inserted into the equation below: ARR = 174 * 90 *12 = 187,920 ($/year)

Example Problem #2:

The variables needed for this problem are provided below:

average monthly recurring revenue ($) = 180 number of customers = 30 Entering these values and solving gives: ARR = 180* 30 *12 = 64,800 ($/year)