ARR for subscription apps: how to calculate annual recurring revenue

ARR is a straight multiple of MRR. RevenueDot takes every paid subscription that has access at the end of the period, converts its current price to US dollars, and scales it to one month with a factor from the product's duration: 1 day ×30, 3 days ×10, 1 week ×4, 2 weeks ×2, 4 weeks ×1, 1 month ×1, 2 months ×½, 3 months ×⅓, 6 months ×⅙ and 1 year ×1/12. Without a catalog duration, RevenueDot uses the length of the paid period itself. The sum is MRR, and ARR is that sum times 12.

ARR is a snapshot at the end of each period. The current period is measured now and marked incomplete. A cancelled subscription counts until its paid time ends, a subscription in a grace period counts, and a refunded subscription stops at the refund. Free trials count zero. Sandbox purchases, granted access and Family Sharing purchases are excluded.

Each subscription keeps the exchange rate of its purchase date, so ARR does not drift when currencies move. You can filter or segment by app, store, product, product duration, offering, country, platform and app version. The Subscription Status chart can show ARR split by set to renew, set to cancel and billing issue.

Open it in the dashboard under Analytics > Charts, or call GET /v2/projects/{project_id}/charts/arr. The response has the same shape as RevenueCat's Charts API.

Illustrative numbers for one day. Each plan is scaled to a monthly value, added up, and multiplied by 12.

MRR = 1,000 + 250 + 160 = $1,410. ARR = 1,410 × 12 = $16,920.

ARR is the number investors, acquirers and partners ask for first, because it puts monthly plans, annual plans and weekly plans on one yearly scale. It also helps you set a growth target for the year and see how far the current subscription base already gets you.

ARR is a run rate. It shows what the business earns per year if nothing changes, and for a consumer app with fast churn that can overstate what you will really collect. Read it with churn and retention, and use Revenue for money that has already arrived.

How to read it

• ARR is exactly 12 times MRR. If ARR looks wrong, check MRR and the product durations first.
• ARR does not fall when a customer cancels. It falls when the paid time runs out. Use Subscription Status with the ARR measure to see how much is set to cancel.
• RevenueDot values each subscription at the price of its current paid period. A discounted first period lowers ARR until the next renewal. Paid introductory offers are not told apart from regular paid periods yet.
• One-time purchases and ad revenue are not recurring, so ARR leaves them out.
• Segment by product duration to see how much of your ARR rests on annual plans.