1. What is Yearly Recurring Revenue?

Yearly Recurring Revenue (YRR) is a key metric for subscription-based businesses that represents the annualized value of all active subscription contracts. It provides a predictable revenue forecast and helps in business planning and valuation.

2. How Does the Calculator Work?

The calculator uses the simple YRR formula:

Where:

• \( MRR \) — Monthly Recurring Revenue ($)
• \( 12 \) — Number of months in a year

Explanation: This calculation annualizes the monthly recurring revenue by multiplying it by 12 months, providing the projected yearly revenue from current subscriptions.

3. Importance of YRR Calculation

Details: YRR is crucial for SaaS and subscription businesses as it helps in financial forecasting, investor reporting, growth tracking, and making strategic business decisions. It provides a clear picture of the company's predictable revenue stream.

4. Using the Calculator

Tips: Enter your current Monthly Recurring Revenue in dollars. The value must be a positive number. The calculator will instantly compute your Yearly Recurring Revenue.

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between MRR and YRR?
A: MRR (Monthly Recurring Revenue) shows monthly subscription income, while YRR (Yearly Recurring Revenue) annualizes this figure to show projected yearly income from current subscriptions.

Q2: Does YRR account for churn or new customers?
A: This basic calculation assumes current MRR remains constant. For accurate forecasting, you should factor in expected churn rates and new customer acquisition.

Q3: When should I use YRR vs ARR?
A: YRR typically refers to revenue from current subscriptions, while ARR (Annual Recurring Revenue) often includes contracted revenue for the full year, accounting for multi-year contracts.

Q4: How often should I calculate YRR?
A: Monthly calculation is recommended to track growth trends and maintain accurate financial projections for your subscription business.

Q5: What are good YRR growth rates?
A: Growth rates vary by industry, but typically 20-30%+ annual YRR growth is considered strong for SaaS companies, though this depends on the company's stage and market.