What this calculator does
A run rate takes whatever a business made in one period and scales it up to a full year, on the assumption that the current pace continues. It answers “if nothing changes, what would a year at this pace look like,” which is different from actual revenue: a run rate is a projection, not a result.
This is the calculation behind ARR (annualised recurring revenue), one of the most quoted figures in subscription businesses, and it works exactly the same way whether the underlying period is a month, a quarter, a week or a single day.
The formula
The run rate is simply the period’s value multiplied by however many of that period fit into a year: monthly revenue × 12, quarterly revenue × 4, weekly revenue × 52, or daily revenue × 365. It carries no adjustment for growth, seasonality or one-off spikes in that period: it assumes the exact figure just observed holds steady for the other periods still to come.
| Term | Meaning |
|---|---|
| Period value | Revenue (or any recurring figure) for one period. |
| Run rate | Period value × periods per year: what that pace implies over a full year. |
| ARR | Annualised recurring revenue: a run rate applied specifically to recurring revenue, most often monthly. |
The inputs explained
| Field | What to enter |
|---|---|
| Value for the period ($) | The revenue (or other figure) achieved in a single period. |
| Period length | What kind of period that figure covers. |
When to use it
Reporting ARR for a subscription business
ARR is monthly recurring revenue × 12, the standard headline metric for SaaS and subscription companies, since it turns a single month’s recurring revenue into a comparable annual figure.
Projecting from a strong recent quarter
A business having its best quarter yet can see what that pace would mean sustained for a year, which is useful context even though the actual annual result will almost never match a simple run-rate projection exactly.
Comparing businesses reporting on different cadences
One company reporting weekly revenue and another reporting monthly can both be put on the same annualised footing this way, making a like-for-like comparison possible.
Checking a run-rate claim against reality
A run rate built from an unusually strong single period (a big one-off contract, a seasonal peak) will overstate what a typical year actually looks like: worth checking which period the run rate was built from before relying on it.
Worked examples
Every figure in the tables below is produced by this page’s own calculator at build time, so the numbers and the tool always agree. Select any row to load that scenario.
How the same monthly figure annualises at different cadence assumptions
The same $42,000 figure, extrapolated as if it were a monthly, quarterly, weekly or daily result.
| Period length | Annualised run rate | Monthly equivalent |
|---|---|---|
| Monthly | $504,000.00 | $42,000.00 |
| Quarterly | $168,000.00 | $14,000.00 |
| Weekly | $2,184,000.00 | $182,000.00 |
| Daily | $15,330,000.00 | $1,277,500.00 |
How the run rate scales with the period figure, monthly cadence
A monthly cadence with the period’s revenue figure varying.
| Monthly value | Annualised run rate | Quarterly equivalent |
|---|---|---|
| $5,000 | $60,000.00 | $15,000.00 |
| $15,000 | $180,000.00 | $45,000.00 |
| $42,000 | $504,000.00 | $126,000.00 |
| $80,000 | $960,000.00 | $240,000.00 |
| $150,000 | $1,800,000.00 | $450,000.00 |
Questions
Is run rate the same as actual annual revenue?
No. Run rate is a projection based on a single period continuing unchanged; actual annual revenue reflects what really happened across every period, including any growth, seasonality or one-off events along the way. The two only match by coincidence.
Why do SaaS companies quote ARR instead of actual trailing revenue?
Because ARR reflects the current pace of recurring revenue, which better represents the business today than trailing revenue that includes months of slower growth from earlier in the year.
What is the risk of relying on run rate?
It silently assumes no seasonality and no change in trend. A run rate built from a seasonally strong month, or a month with a one-off large contract, will overstate a typical year.
How is run rate different from a growth-rate calculation?
A growth-rate calculator (like the others in this category) compares two periods to find a rate of change. Run rate does not compare anything: it takes a single period and scales it up, with no reference to any prior period at all.
Can run rate be applied to something other than revenue?
Yes: any recurring, comparably-measured figure works: users added, orders processed, units produced. The calculation is identical; only the label on the number changes.
To measure whether that pace is actually accelerating or slowing, see the month-over-month growth calculator. For the combined health of growth and profitability, use the Rule of 40 calculator.