MRR and ARR calculator
Add a row per plan, and the annual ones get normalized the way they should be. MRR, ARR and where twelve months of compounding growth takes you.
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How to calculate MRR
MRR is the sum of every active subscription, normalized to a monthly amount. Monthly plans contribute their price. Annual plans contribute a twelfth of theirs, every month of the term, rather than their full value in the month they were billed.
That normalization is the step homegrown spreadsheets skip, and it is the reason their MRR chart spikes on renewal dates. A $2,400 annual plan is $200 of MRR for twelve months. One-off fees, services and variable usage stay out of the number entirely, because none of them are guaranteed to repeat.
- Monthly plan: price x customers
- Annual plan: (price ÷ 12) x customers
- Quarterly plan: (price ÷ 3) x customers
- Trials, one-off fees and usage overages: excluded
MRR, ARR and the 12-month projection
ARR is simply MRR times twelve, the convention nearly every reporting tool uses. It carries no extra information; it exists because boards and investors think in years.
The projection compounds monthly growth rather than multiplying it. Five percent a month is about 80% over a year, not 60%, and the gap widens fast at higher rates. Treat it as a sanity check on a plan, not a forecast: it assumes today's growth rate holds for twelve straight months, which almost nothing does.
Frequently asked questions
How do I count annual plans in MRR?
Divide the annual price by twelve and count that every month of the term. A $1,200 annual plan is $100 of MRR for twelve months, not $1,200 in the month it was invoiced.
Should one-off fees count toward MRR?
No. Setup fees, migrations and professional services are real revenue but they do not recur, and MRR exists to measure what you can count on next month. Keep them in your P&L, out of your run rate.
What about customers whose payment just failed?
Keep them in MRR while the retries run and service continues. Removing them the day a card bounces records a cancellation that has not happened, and then records a reactivation when the retry succeeds.
Is ARR always MRR times 12?
It is the standard convention and the one Kometrics uses. Some companies instead count only the contracted value of annual subscriptions, which gives a different, usually smaller number. Pick one and be consistent, because mixing them is how two decks end up disagreeing about the same quarter.
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