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How to calculate annual recurring revenue (ARR) in Excel and Google Sheets
Topic:SaaS metricsExcel & Google Sheets
=SUMIF(C2:C6,"Monthly",B2:B6)*12+SUMIF(C2:C6,"Annual",B2:B6)✓
Verified example
Computed by a real spreadsheet engine on the sample data below.
| Customer | Contract Value | Billing Cycle |
| Acme Corp | 500 | Monthly |
| Beta LLC | 12000 | Annual |
| Gamma Inc | 300 | Monthly |
| Delta Co | 6000 | Annual |
| Epsilon Ltd | 200 | Monthly |
=SUMIF(C2:C6,"Monthly",B2:B6)*12+SUMIF(C2:C6,"Annual",B2:B6)→30000
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Step by step
- 1Build a table with columns: Customer (A), Contract Value (B), Billing Cycle (C — either 'Monthly' or 'Annual').
- 2For annual subscribers, the ARR contribution equals the contract value directly.
- 3For monthly subscribers, multiply the monthly value by 12 to annualize it.
- 4Use =SUMIF(C2:C6,"Monthly",B2:B6)*12 to total annualized monthly contracts.
- 5Add =SUMIF(C2:C6,"Annual",B2:B6) for annual contracts. Combine both in one formula for total ARR.
Tips
- ARR = MRR × 12 is the fastest shortcut once you already have MRR calculated; reference that cell rather than recalculating from scratch.
- Do not include non-recurring revenue (implementation fees, one-time add-ons) in ARR — it inflates the metric and misleads forecasts.
- Segment ARR by plan tier, cohort, or geography in additional columns so you can spot growth drivers without losing the top-line number.
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Frequently asked
What is the difference between ARR and ACV?
ARR is total annual recurring revenue across all customers. ACV (Annual Contract Value) is the annualized value of a single contract, often used in sales reporting.
Should ARR include multi-year contracts at full value?
No. For a 3-year $36,000 contract, ARR is $12,000/year, not $36,000. ARR normalizes to the annual run rate, not the total contract value (TCV).
How do I track ARR growth month over month?
Calculate ARR at the start and end of each month, then compute (End ARR − Start ARR) / Start ARR to get the growth rate. A waterfall chart of new, expansion, contraction, and churn ARR shows the composition.
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