The Seed Stage ARR Calculator estimates annual recurring revenue from a startup’s active recurring customers and average monthly recurring revenue per customer. It gives founders and investors a consistent annualized run-rate measure for subscription revenue.
The calculation is most useful when the customer base and pricing are reasonably stable. It should not be interpreted as recognized annual revenue or a forecast by itself.
Include customers with an active recurring subscription at the measurement date.
Use average recurring monthly revenue, excluding one-time setup or services revenue.
Enter recurring revenue not captured by the customer average, if applicable.
Use MRR for the current monthly run rate and ARR for its annualized equivalent.
Customer MRR = Active customers × Monthly recurring revenue per customer
Total MRR = Customer MRR + Other MRR
ARR = Total MRR × 12
This is a run-rate calculation. It assumes the current monthly recurring revenue continues for twelve months.
ARR annualizes the current recurring monthly revenue base; it is not the same as cash collected or GAAP revenue.
Exclude nonrecurring fees unless they are genuinely contracted to repeat.
Given: 120 customers, $180 monthly recurring revenue per customer, and $2,500 in other MRR.
Calculation: Customer MRR = 120 × $180 = $21,600. Total MRR = $24,100. ARR = $24,100 × 12 = $289,200.
Result: Estimated ARR is $289,200.
Yes, if they are recurring. Convert contracted recurring revenue to a monthly equivalent before adding it to MRR.
Usually not. One-time implementation, hardware, or consulting fees are not recurring revenue.
Update it whenever customer counts, recurring pricing, upgrades, downgrades, or churn materially change MRR.
No. ARR annualizes the current run rate and does not model future sales, churn, or expansion.
Use actual total customer MRR when available. Otherwise, use a carefully calculated weighted average monthly revenue per customer.