Annual Recurring Revenue Calculator
ARR Breakdown
Current MRR-
Current ARR-
ARPU (per customer/month)-
Net Revenue Retention-
Annual Churn Impact-
Projected ARR (12 months)-
SaaS Metrics Benchmarks
| Metric | Poor | Average | Good | Excellent |
|---|---|---|---|---|
| Net Revenue Retention | <90% | 90-100% | 100-120% | 120%+ |
| Monthly Churn Rate | >5% | 3-5% | 1-3% | <1% |
| MRR Growth Rate | <2% | 2-5% | 5-10% | 10%+ |
| LTV:CAC Ratio | <1:1 | 1-3:1 | 3-5:1 | 5:1+ |
Key SaaS Revenue Metrics
Rule of 40
Growth+Margin>40%
Magic Number
>0.75
Payback Period
<12 months
How to Use This Calculator
1
Enter your MRR
Input your current Monthly Recurring Revenue in GBP. Include only recurring subscription revenue, not one-off charges.
2
Enter customer count
Input your total number of active paying customers to calculate ARPU (Average Revenue Per User).
3
Set churn and growth rates
Enter your monthly customer churn rate and MRR growth rate. These determine long-term revenue projections.
4
Add expansion revenue
If customers upgrade or add seats, enter the average monthly expansion MRR. This is key to Net Revenue Retention.
5
Review ARR projections
The calculator shows current ARR, projected ARR in 12 months, ARPU, NRR, and the annual impact of churn.
Frequently Asked Questions
What is ARR in SaaS?
Annual Recurring Revenue (ARR) is the total predictable revenue a SaaS company expects to receive from subscriptions over the next 12 months. It is calculated as MRR x 12. ARR only includes recurring subscription revenue and excludes one-off fees, professional services, and variable usage charges.
How do you calculate ARR from MRR?
ARR = MRR x 12. If your Monthly Recurring Revenue is £50,000, your ARR is £600,000. For accuracy, ARR should be calculated from normalised MRR that excludes any one-off discounts, credits, or non-recurring charges.
What is a good ARR growth rate?
For early-stage SaaS companies (<£1M ARR), 200-300% annual growth is common. For companies at £1-10M ARR, 100-200% is strong. At £10M+, 50-100% growth is excellent. Bessemer Venture Partners benchmarks show the top quartile of SaaS companies grow at 50%+ even at scale.
What is the difference between ARR and revenue?
ARR represents only the recurring subscription component of revenue, normalised to an annual figure. Total revenue may include one-off implementation fees, consulting, hardware, or usage-based charges. Investors value ARR more highly than total revenue because it is predictable and compounds.
What is Net Revenue Retention (NRR)?
NRR measures how much revenue you retain from existing customers including expansion, contraction, and churn. NRR = (Starting MRR + Expansion - Contraction - Churn) / Starting MRR x 100. A NRR above 100% means your existing customer base is growing even without new customers.
When should I use ARR vs MRR?
Use MRR for month-to-month operational tracking and short-term planning. Use ARR for annual planning, fundraising, valuations, and board reporting. ARR is the standard metric for SaaS valuations. If your contracts are predominantly annual, ARR may be more accurate than MRR x 12.
Official Sources & References
Data verified against official UK government sources. Last checked April 2026.