MRR to ARR Growth Calculator
Example: Current monthly recurring revenue: 20000 $ · Monthly growth rate: 8 %
| Current ARR | $240,000 |
| Projected MRR in 12 months | $50,363 |
| Projected ARR in 12 months | $604,361 |
| MRR gained over the year | $30,363 |
Worked example
Start at $20,000 MRR, which is $240,000 ARR today. Grow 8% a month and after twelve months of compounding the MRR reaches about $50,363, roughly 2.5 times where you started, for a projected ARR near $604,000. That is $30,363 of new MRR added purely from steady monthly growth, showing why compounding growth is the whole game in SaaS.
Frequently asked questions
How is ARR calculated?
ARR is simply your current MRR multiplied by twelve. It represents the annualized run rate of your recurring revenue, assuming today's MRR held for a year. Growth and churn then move it up or down.
Is compounding growth realistic?
Sustained high monthly growth is hard to maintain as you scale, since each month's target grows in absolute terms. Use this projection as a best-case run rate and revisit the growth rate as you get larger.
Does this account for churn?
The growth rate you enter should be your net growth rate, new and expansion revenue minus churned revenue. If you enter gross growth, the projection will be too optimistic. Our churn-impact tool helps quantify the drag.
Why do investors focus on ARR?
ARR normalizes recurring revenue into an annual figure that is easy to compare across companies and to value. Growth rate of ARR, not just its size, is what drives most SaaS valuations.