Find your monthly and annual recurring revenue from your subscriber count and average revenue per user — the heartbeat of any subscription business.
ARR here is simply MRR × 12, a run-rate snapshot — it doesn't project growth or churn. Track MRR movement (new, expansion, churned) for the real picture. Estimate only.
Monthly recurring revenue is subscribers times average revenue per user. Annual recurring revenue is the yearly run rate — MRR times 12. Together they're the clearest read on a subscription business's health.
MRR = subscribers × ARPU · ARR = MRR × 12
Monthly recurring revenue normalises every contract length to one month so that periods can be compared at all. Annual recurring revenue is that instant multiplied by twelve. The word to hold on to is instant: ARR is a statement about today projected forward on the assumption that nothing changes, and in a subscription business something always changes. It is also not accounting revenue. If all 300 of these subscribers signed in December, the ARR reads $90,000 while the revenue actually earned in the year is a small fraction of it — a distinction that matters the moment a lender, a buyer or a tax return is involved. The other discipline is what goes into ARPU at all: setup fees, one-off migrations and non-repeating overages are not recurring, and folding them in inflates both numbers permanently.
300 subscribers × $25 = $7,500 of MRR, and $7,500 × 12 = $90,000 of ARR. Now decompose it, because the run rate never says this part out loud. Suppose 3% of customers leave each month: that is 9 customers and $225 of MRR gone every month before you have grown at all. To finish a month 10% up you need $750 of new and expansion revenue plus that $225 of replacement — $975, or 39 net-new subscribers against a base of 300, which is 13% gross growth to show 10% net. Left alone for a year the compounding is worse than it sounds: 0.97 raised to the twelfth is 0.6938, so 3% a month is 30.6% a year, the book falls to 208 subscribers and $5,204 of MRR, and you are filling a $2,296 hole before the first dollar of growth. The same assumption gives an average customer life of 1 ÷ 0.03 = 33.3 months, so at an 80% gross margin each subscriber is worth $25 × 0.8 × 33.3 = $666.67.
There are only three levers — more subscribers, higher ARPU, less churn — and they are not equally priced. Taking monthly churn from 3% to 2% stretches the average life from 33 to 50 months and lifts lifetime value from $666.67 to $1,000 without acquiring a single new customer, which is why retention work usually beats the equivalent spend on acquisition. Pricing decisions need the same care: an annual plan at $250 with two months free improves cash enormously but contributes $250 ÷ 12 = $20.83 to MRR, a 16.7% haircut against the monthly price, so decide whether you are optimising cash or the MRR line and be consistent about it. On whether 3% churn is good or bad, we will not quote you a benchmark: published SaaS churn figures vary wildly by price point, contract length and customer size, and we could not verify a current one from a primary source. Measure your own cohorts and compare yourself to last quarter.
The first is multiplying by twelve and calling the result revenue — in a pitch it is optimism, in a loan application it is worse. The second is confusing logo churn with revenue churn: nine departures might be $225 or $900 depending on which nine, and a business can lose customers every month while revenue grows, because expansion on the accounts that stay outruns the losses. Track net revenue retention alongside the headcount. The third is a blended ARPU hiding two businesses: $25 average could be 280 customers at $10 and 20 at $235, and nothing you decide from the average will be right for either group. The fourth is counting what is not paying — free trials, paused accounts, comped logins — which inflates MRR now and produces a mysterious collapse later.
One multiplication gives you the level. Everything you actually manage is the movement: a monthly table running starting MRR, new, expansion, contraction, churned and ending MRR, so that a flat month can be read as either quiet or as churn exactly cancelling growth — two very different businesses that share one number. Add a cohort view once you have a year of it. Our Subscription Tracker keeps the recurring side of that; the field worth adding by hand is the reason each cancelled account gave.
Not here — this is a run-rate snapshot. Real ARR movement comes from new, expansion, contraction, and churned revenue over the year.
Add subscribers, raise ARPU (upsells, tiers), or cut churn. Reducing churn compounds because every retained customer keeps paying.
Related: churn rate calculator · customer lifetime value calculator · subscription tracker · all free calculators.
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