MRR / ARR Calculator
420 customers at $49.00/mo is $20,580 MRR and $246,960 ARR.
What is MRR / ARR?
Monthly recurring revenue (MRR) is the predictable subscription revenue a business earns each month, calculated as paying customers times average revenue per user (ARPU).
Annual recurring revenue (ARR) is the same figure run out over a year: MRR times 12. Both count only recurring revenue, leaving out one-off fees.
These are the core vital signs of a subscription business. Because the revenue repeats, tracking MRR over time shows whether the business is genuinely growing, holding or shrinking.
How to calculate MRR / ARR
MRR = Customers × ARPU · ARR = MRR × 12
- Count paying customers. The number of active paying subscriptions. The example uses 420.
- Find average revenue per user. Total monthly recurring revenue divided by customers, 49 in the example.
- Multiply for MRR. 420 customers at 49 a month is 20,580 MRR.
- Multiply MRR by 12 for ARR. 20,580 times 12 is 246,960 ARR.
Worked example
420 paying customers, each paying 49 a month on average.
| Paying customers | 420 |
|---|---|
| Average revenue per customer / mo | $49 |
| Result | $20,580 MRR |
The subscriptions generate 20,580 in predictable revenue every month, which runs out to 246,960 ARR over a year. Track the figure monthly to see whether new and expansion revenue is outpacing churn.
How to improve MRR / ARR
- Add customers, the most direct way to grow MRR.
- Lift ARPU with higher tiers, add-ons and usage-based pricing.
- Reduce churn so the MRR you build each month is not lost the next.
- Grow expansion revenue from existing customers, which compounds on top of new sales.
Frequently asked questions
- What are MRR and ARR and how do you calculate them?
- Monthly recurring revenue (MRR) is the predictable revenue your subscriptions generate each month, found by multiplying paying customers by average revenue per user (ARPU). Annual recurring revenue (ARR) is simply MRR times 12. 420 customers at 49 a month is 20,580 MRR and 246,960 ARR.
- What is ARPU?
- ARPU is average revenue per user (or per account): total recurring revenue divided by the number of paying customers in a period. It is the per-customer figure that, multiplied by your customer count, gives MRR. Rising ARPU means each customer is worth more, often through upgrades or higher tiers.
- What is a good MRR?
- There is no good MRR in absolute terms, since a number that is huge for one business is small for another. What matters is the trend: steady month-on-month growth, and growth that outpaces the revenue you lose to churn. Judge MRR by its direction and your growth rate, not a target figure.
- Should I report MRR or ARR?
- They describe the same revenue at different scales, so use whichever fits the audience. Early-stage and monthly-billed businesses tend to track MRR because changes show up faster; later-stage and annually-billed companies often headline ARR. ARR is always MRR times 12, so converting between them is straightforward.
- Does MRR include one-off fees?
- No. MRR counts only recurring subscription revenue, so one-time charges like setup or onboarding fees are excluded. Mixing them in overstates the predictable revenue the metric is meant to capture. Keep one-off income in a separate line.