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How to Calculate SaaS ARR from MRR
Most online ARR calculators multiply revenue by a "growth rate" once and call it done. This one runs a 36-month simulation — month-by-month MRR, churn, expansion, new acquisitions — so the numbers reflect how a real SaaS book grows.
How SaaS ARR is actually projected
To calculate SaaS ARR properly you cannot just take last month's MRR and multiply by twelve. ARR depends on when customers are acquired versus when they churn — a 5 % monthly churn rate eats compound revenue differently depending on whether your new MRR is front-loaded or steady. This calculator runs a month-by-month MRR simulation for 36 months with explicit churn, expansion, and new-MRR inputs.
The simulation
mrr[0] = starting_mrr
for m in 1..36:
mrr[m] = mrr[m-1] × (1 − churn + expansion) + new_mrr_per_month
arr_36m = mrr[36] × 12The compound factor (1 − churn + expansion) is your monthly net revenue retention (NRR) expressed as a decimal. NRR above 100 % means existing customers grow faster than they churn — the gold standard for SaaS. NRR below 95 % is a leaky bucket that no amount of new-MRR acquisition can fully compensate for.
What the result tells you
- 36-month ARR — what your book is worth if current dynamics hold. Useful for board planning and valuation.
- Exit MRR per year — month-12, month-24, month-36 MRR. Compare year-over-year growth to spot when expansion starts compounding.
- Monthly NRR — the compounding force. Above 100 % = revenue grows even without new acquisitions; below 100 % = leaky bucket.
Why month-by-month matters
A lazy "ARR = year-1 revenue × (1 + growth)^3" multiplier fudges churn timing badly. Real ARR depends on the order of events — customers acquired in month 1 with 3 % monthly churn lose 60 % of their cohort revenue by month 30, but customers acquired in month 30 are still mostly there. Multiplying by a growth rate hides this.
How to forecast SaaS ARR from MRR
Four inputs, one 36-month forecast. All math runs in your browser — no data leaves.
Enter current MRR
Use the latest month's recurring revenue. Exclude one-time fees, setup, and overages.
Set realistic new MRR per month
Average new MRR from new logos in the last 3 months. Be honest — most founders overestimate the trend.
Enter monthly revenue churn
Lost MRR / start-of-month MRR. Typical B2B SaaS: 1–3 %. SMB SaaS: 3–6 %. Convert from annual if needed.
Enter monthly expansion
Upsells + cross-sells + plan upgrades, as % of starting MRR. Good SaaS hits 1–2 %; great SaaS hits 2–4 %.
Read the forecast
Year-1 exit MRR is the most accurate; year-3 is directional. If 36-month ARR looks unrealistic, your churn or expansion input is wrong.
Frequently asked questions about SaaS ARR forecasting
MRR is monthly recurring revenue — what you bill (or would bill) every month. ARR is annual recurring revenue — MRR multiplied by 12. ARR is the headline metric for investors and boards; MRR is the operating metric for product and sales teams.
For current-month ARR, you can. For forecast ARR (what ARR will be in 12, 24, or 36 months), no — the answer depends on when customers are acquired vs churned. A month-by-month simulation captures this; a single multiplier does not.
1–3 % for B2B SaaS sold annually; 3–6 % for SMB SaaS sold monthly; below 1 % for enterprise SaaS with multi-year contracts. Above 6 % consistently means product-market fit is incomplete or pricing is misaligned.
NRR = (1 − monthly_churn + monthly_expansion) × 100 %. Above 100 % means existing customers generate more revenue over time even without new logos — the holy grail of SaaS. The calculator shows monthly NRR explicitly.
No. MRR is recurring only — exclude setup fees, training, one-time professional services, and overage charges. Including non-recurring revenue makes the forecast wildly optimistic.
Series A typically enters at $1–3M ARR. A "good" 3-year trajectory triples that to $3–10M with 60–80 % year-over-year growth slowing as base grows. If the calculator shows you crossing $20M in 36 months from a $1M start, your inputs are aggressive.
