# SaaS ARR Calculator and Benchmarks

With our interactive ARR calculator, discover how each component—new ARR, expansion, churn, and more—affects your bottom line. Learn why reducing churn, even by a small percentage, can create significant long-term gains, and explore how benchmarks help you set ambitious, achievable growth targets.

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

**Gross New ARR**

Represents the ARR generated from new customers in a given period.**Expansion ARR**

Measures the added revenue from existing customers, including upgrades or additional products purchased.**Contraction ARR**

Captures the ARR lost due to downgrades, such as customers reducing their subscription plans or seat counts.**Churn ARR**

The total ARR lost from customers who cancel their subscriptions.**Reactivation ARR**

Revenue from customers who re-subscribe after canceling.**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**

Time to $1M ARR | Good | Great |
---|---|---|

After Launching | 1 year | 9 months |

**After $1M ARR**

Year | Good Growth Rate | Great Growth Rate |
---|---|---|

Year 1 | 3x YoY (10% MoM) | 5x YoY (16% MoM) |

Year 2 | 3x YoY (10% MoM) | 4x YoY (12% MoM) |

Year 3 | 2x YoY (5% MoM) | 3x YoY (10% MoM) |

Year 4 | 2x YoY (5% MoM) | 2.5x YoY (8% MoM) |

Year 5 | 2x YoY (5% MoM) | 2.5x YoY (8% MoM) |

**By Funding Round**

Funding Round | Good Growth Rate | Great Growth Rate | Below Expectations |
---|---|---|---|

Series A | $1M ARR, 2-3x YoY | $1M ARR, 3x+ YoY | <$1M ARR, <2x YoY |

Series B | $5M ARR, 2-3x YoY | $5M ARR, 3x YoY | <$5M ARR, <2x YoY |

Series C+ | $20M ARR, 1-2x YoY | $20M ARR, 2-3x YoY | <$20M ARR, <1x YoY |