GuideCalculatorDetailed Guide

How to Build a ARR Calculator

Annual Recurring Revenue (ARR) is the cornerstone metric for subscription businesses. An ARR calculator helps founders, investors, and finance teams project yearly revenue from monthly subscriptions.

What is a ARR Calculator?

ARR represents the annualized value of recurring subscription revenue. It's calculated by multiplying Monthly Recurring Revenue (MRR) by 12, or by summing all active annual subscription values. ARR excludes one-time fees, variable usage charges, and non-recurring revenue.

The Formula

ARR = MRR × 12
ARR = Sum of all active annual subscription values
Net ARR = Starting ARR + New ARR + Expansion ARR - Churned ARR

Code Example

JavaScript

function calculateARR(subscriptions) {
  return subscriptions.reduce((total, sub) => {
    if (sub.billingCycle === 'monthly') {
      return total + (sub.amount * 12);
    }
    return total + sub.amount;
  }, 0);
}

function calculateNetARR(starting, newARR, expansion, churned) {
  return starting + newARR + expansion - churned;
}

How to Build It

1
Create input fields for MRR or individual subscription amounts
2
Add billing cycle selector (monthly/annual) for each subscription
3
Implement the ARR calculation formula
4
Display breakdown showing contribution from each subscription
5
Add export functionality for financial reports

Key Features to Include

Support both MRR-based and subscription-level calculations

Show ARR growth rate and projections

Calculate net new ARR (new + expansion - churn)

Export results for investor decks and board meetings

Historical tracking to visualize ARR trends

Monetization Strategies

Freemium model: basic calculator free, advanced projections paid

Lead generation for SaaS financial tools

Embed in startup resource sites for affiliate revenue

Offer API access for SaaS platforms to integrate

Recommended Tech Stack

Frontend

React or Next.js for responsive UI with real-time calculations

Backend

Client-side only for basic calculators; add API routes for saving/sharing

Hosting

Vercel or Netlify for fast, global deployment

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