MRR and ARR are the north star metrics for subscription businesses.
MRR = sum of all active subscription revenue per month. ARR = MRR × 12.
Use this calculator when preparing for a business decision that depends on this metric. Calculating the figure in advance — rather than estimating — prevents the kind of imprecision that leads to suboptimal choices.
Many business metric errors arise from using the wrong time period for the calculation. Annualising a figure from a seasonal month, or averaging a figure that changes over time, can produce misleading results that don't reflect steady-state performance.
A startup founder uses the calculator to determine break-even point: fixed monthly costs £12,000, variable cost per unit £18, selling price £42. Break-even is 500 units per month — a concrete sales target that the team can evaluate against pipeline and capacity.
Monthly Recurring Revenue — the predictable revenue from all active subscriptions each month.
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