SaaS ARR Calculator and Benchmarks

Annual Recurring Revenue (ARR) isn’t just a metric; it’s the lifeblood of every subscription-based business. ​

This guide introduces a simple, interactive SaaS ARR calculator to help you calculate your ARR in real-time, using core inputs to evaluate Net New ARR, Contraction, Churn, and more.

ARR Formula:
ARR = Gross New ARR + Expansion ARR + Reactivation ARR − Contraction ARR − Churn ARR + Previous Year's ARR

Components of an ARR Calculator

1. Gross New ARR
   Represents the ARR generated from new customers in a given period.
2. Expansion ARR
   Measures the added revenue from existing customers, including upgrades or additional products purchased.
3. Contraction ARR
   Captures the ARR lost due to downgrades, such as customers reducing their subscription plans or seat counts.
4. Churn ARR
   The total ARR lost from customers who cancel their subscriptions.
5. Reactivation ARR
   Revenue from customers who re-subscribe after canceling.
6. Previous ARR
   The total ARR from the last period, serving as a base to build on.

SaaS ARR Calculator

Enter your figures to instantly calculate ARR based on these components. Adjust any input, and see how each change affects your bottom line. This live calculator will break down your Total ARR and Net New ARR, providing a quick look at how ARR is growing (or shrinking) over time.

ARR Calculator Formula Explanation

Suppose you have the following metrics for this year:

• Gross New ARR = $2,000,000
• Expansion ARR = $600,000
• Contraction ARR = $100,000
• Churn ARR = $1,800,000
• Reactivation ARR = $50,000
• Previous ARR = $7,000,000

Here’s how these components contribute to your Total ARR and Net New ARR:

Calculating Net New ARR:

Net New ARR = Gross New ARR + Expansion ARR + Reactivation ARR − Contraction ARR − Churn ARR = 750,000

Calculate Total ARR:

Total ARR = Previous ARR + Net New ARR = 7,750,000

How Churnkey Can Help Improve ARR?

We’re everything your customer-obsessed team needs to improve retention, automatically. With Churnkey, companies save 20-40% of the revenue they would have otherwise lost to churn. If you aren't yet sure how retention impacts your business, use our free churn metrics product.

To improve your ARR, sign up for Churnkey or book a demo.

ARR Benchmarks

After Launching

After $1M ARR

By Funding Round

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