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