Subscription Ecommerce ARR Calculator

ARR is the yearly revenue you can count on from subscriptions or recurring customers. If 500 customers each pay you $50 per month, your MRR is $25,000 and your ARR is $300,000. It is the single most important number for any subscription business because it tells you how big your predictable revenue base is.

The simplest version is MRR times 12. So if you bring in $10,000 per month from recurring customers, your ARR is $120,000. This calculator also factors in growth and churn, so you get a more realistic picture of where that number is heading over the next few years.

MRR is what you collect this month. ARR is that number annualized. MRR is better for tracking short-term changes like a new pricing plan or a bad churn month. ARR is better for long-term planning, investor conversations, and setting annual targets.

Because it compounds. If you lose 5% of revenue each year to cancellations, that does not sound bad. But over 3 years, you have lost nearly 15% of what you started with. Meanwhile every new customer you add has to replace that lost revenue before your ARR actually grows. That is why cutting churn by even 1-2% has a bigger impact than most people expect.

It depends on your stage. Early-stage companies growing off a small base often hit 50-100% per year. More established businesses with $1M+ ARR typically aim for 20-40%. The key is net growth after churn. Growing 40% but churning 15% means your real growth is 25%.

Expansion revenue is extra money from existing customers -- upgrades, add-ons, usage increases. It matters because it costs almost nothing compared to acquiring a new customer. Some of the best subscription businesses get more expansion revenue than new customer revenue, which means their ARR grows even if they stop marketing.

Yes. If more revenue leaves through churn and downgrades than comes in from new sales and expansions, your ARR shrinks. It is more common than people think, especially when a business scales up sales without fixing retention first.

Monthly is ideal for the underlying MRR. For the full ARR picture with projections, quarterly works well. The point is to catch trends early. If your net growth rate drops two quarters in a row, that is a signal to dig into churn and expansion numbers before it becomes a bigger problem.