How this simple ARR model works
Multiply active paying subscriptions by the average net monthly recurring price to estimate monthly recurring revenue, then multiply by 12. With 100 subscriptions averaging $50 net per month, MRR is $5,000 and ARR is $60,000. If plans vary, use a weighted average or sum each subscription's normalized monthly amount before multiplying by 12.
What belongs in the input
Use recurring subscription value after ongoing discounts where possible. Exclude setup fees, one-time services, taxes collected for authorities, and cancelled subscriptions. Annual contracts can be normalized to a monthly amount, but do not add the same contract again as a separate annual total. Define treatment of trials, delinquent accounts, credits, and usage-based charges before comparing periods.
Do not mistake ARR for cash or profit
Stripe distinguishes recurring revenue metrics from accounting revenue and notes that churn, upgrades, downgrades, and nonrecurring fees affect interpretation. This calculator assumes the current subscription base and average price remain constant for a year. It does not predict renewals, costs, customer acquisition, or cash timing. Review a cohort schedule and accounting records for decisions that require those details.