Definition
MRR and ARR measure the same thing, recurring subscription revenue, over different periods. ARR = MRR × 12. Neither includes one-time sales, and neither is the same as revenue in your accounts.
The difference is practical: MRR is the operating metric you watch month to month, and ARR is the headline number used for annual contracts, fundraising, acquisitions and valuation.
Converting between them
- $1,000 MRR = $12,000 ARR
- $10,000 MRR = $120,000 ARR
- $83,333 MRR = $1,000,000 ARR
- $500,000 ARR = $41,667 MRR
MRR vs ARR at a glance
| MRR | ARR | |
|---|---|---|
| Stands for | Monthly recurring revenue | Annual recurring revenue |
| Formula | Sum of monthly subscription value | MRR × 12 |
| Best for | Monthly plans, early-stage tracking | Annual contracts, B2B, investors, buyers |
| Shows | Month-to-month growth, churn impact | Scale of the business |
| Typical indie use | “$1K MRR”, “$10K MRR” goals | “$1M ARR” milestone |
| Includes one-time sales? | No | No |
Which one should you track?
Track MRR. It reacts fastest to what you do: a pricing change, a launch, a churn problem. Report ARR when you sell yearly contracts, talk to investors or buyers, or compare yourself with SaaS benchmarks, which are almost always ARR-based.
Whichever you quote publicly, say what it includes. A product earning $30K in one-off template sales plus $5K of subscriptions has $5K MRR and $60K ARR, not “$35K MRR”.
MRR vs ARR in practice: how indie makers use it
Indie makers tend to talk in MRR while small and switch to ARR as they grow. One business, both units:
Senja's milestones were shared as $1K MRR (December 2022), ramen profitable at $7.5K MRR (July 2023) and $50K MRR (October 2024), then as $1M ARR by 2026. (sources: indiehackers.com, x.com)
ScrapingBee's public write-up tracks the climb in MRR ($10K MRR in late 2020) and the finish line in ARR ($1M ARR, November 2021). (source: scrapingbee.com)
Tally's $175K MRR in February 2025 was reported as about $2M ARR: the same number, scaled. (source: indiehackers.com)
From our data: how long indie makers took
| Milestone | Makers who reached it | Median time (dated makers) | Middle half |
|---|---|---|---|
| $1K MRR | 112 | < 1 yr (n=22) | < 1 yr – 1 yr |
| $10K MRR | 97 | 1 yr (n=15) | < 1 yr – 2 yrs |
| $1M ARR | 49 | 3 yrs (n=13) | 1 yr – 4 yrs |
| $100K MRR | 40 | 3 yrs (n=9) | 2 yrs – 4 yrs |
Years from the year a maker started to the first year a self-reported figure reached each level. Medians use only makers whose crossing year is pinned down. Full method and every data point: maker journeys.
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Frequently asked questions
Is ARR just MRR times 12?
Yes, for subscription businesses ARR is current MRR multiplied by 12. Companies that sell annual contracts may sum annual contract values instead, which gives the same result.
Should a startup report MRR or ARR?
Track MRR internally because it shows monthly changes. Use ARR for investors, acquirers, annual-contract businesses and benchmark comparisons.
Can ARR be lower than revenue?
Yes. If a large share of revenue is one-time (setup fees, lifetime deals, services), annual revenue can exceed ARR, which only counts recurring subscriptions.
Related terms
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Maker examples are paraphrased from the cited sources and from each maker's IndieMakerList profile; revenue is self-reported unless marked verified. Spotted an error? Tell us.