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ARR Growth Rate Calculator

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Calculate your Annual Recurring Revenue growth rate, T2D3 trajectory, and years to reach your ARR target.

YoY growth rate—
Net new ARR—
ARR in 3 years—
ARR in 5 years—
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ARR growth rate is current ARR minus ARR twelve months ago, divided by ARR twelve months ago, times 100: growing from $1.0M to $1.8M is 80% year-over-year growth. Enter both figures below to see your growth rate, projections and the years needed to reach a target.

Annual Recurring Revenue (ARR) growth rate is the single most important metric for SaaS fundraising and benchmarking. Investors, analysts, and buyers all start with this number — how fast are you growing your predictable annual revenue?

How to calculate ARR growth rate

ARR growth rate = ((Current ARR − Previous ARR) / Previous ARR) × 100

If your ARR was $600k a year ago and is $1.2M today, your YoY growth rate is 100%. You doubled in 12 months — which is the first threshold of the T2D3 framework.

What is T2D3?

T2D3 is a benchmark path for high-growth SaaS companies, popularized by Neeraj Agrawal at Battery Ventures. Starting from ~$1–2M ARR, the path is: - Year 1–2: Triple ARR (300% of starting ARR) - Year 3–5: Double ARR each year

A company that hits T2D3 from $1M ARR reaches: $3M → $9M → $18M → $36M → $72M over five years. This trajectory is what top-tier VCs look for when evaluating Series B and later-stage SaaS investments.

Rule of 72 for ARR doubling time

A quick mental shortcut: divide 72 by your annual growth rate to estimate how many years to double. At 50% growth, you double every 1.4 years. At 25%, every 2.9 years. At 10%, every 7.2 years.

Benchmarks by ARR stage

ARR stage Expected growth Excellent
< $1M 100%+ 200%+
$1M–$5M 80–150% 200%+
$5M–$20M 60–100% 150%+
$20M–$50M 40–80% 100%+
$50M+ 25–50% 70%+

Growth naturally slows as ARR increases — the denominator gets larger. That's why investors look at growth efficiency (ARR growth / net burn) rather than growth rate alone at later stages.

How to use this calculator

Enter your current ARR and your ARR from 12 months ago. The calculator shows your YoY growth rate, 3- and 5-year projections if you maintain this rate, and the number of years to reach any target ARR you set.

Worked example

ARR was $1,000,000 a year ago and is $1,800,000 today: growth is 80% and net new ARR is $800,000. To reach $10,000,000 at a steady 80%, you need about 2.9 years; at 100% growth it takes about 2.5 years.

Frequently asked questions

How do you calculate ARR growth rate? Subtract ARR from twelve months ago from current ARR, divide by the earlier figure and multiply by 100.

What is a good ARR growth rate? It depends on scale: 100% or more below $1M ARR, 80 to 150% between $1M and $5M, and 25 to 50% above $50M. Growth slows as the base gets larger.

Is ARR growth the same as revenue growth? No. ARR measures contracted recurring revenue at a point in time; recognized revenue includes one-off items and lags behind ARR.

How long to reach a target ARR? Take the log of target over current ARR and divide by the log of one plus the growth rate. The calculator does this when you set a target.

What is T2D3? A benchmark path of tripling ARR twice and then doubling it three times, starting from about $1M.

What does this calculator do? Calculate your Annual Recurring Revenue growth rate, T2D3 trajectory, and years to reach your ARR target.

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T2D3 Growth Benchmark — What It Is and Whether Your Startup Qualifies

T2D3 (triple twice, double three times) is the VC benchmark for high-growth SaaS. Here's the exact ARR thresholds, how to calculate your pace, and what investors actually look for.

T2D3 stands for "Triple Twice, Double Three Times" — a growth framework coined by Neeraj Agrawal at Battery Ventures in 2015. It describes the ARR trajectory a SaaS company needs to achieve to reach $100M ARR in roughly five years from a $1–2M ARR starting point.

The T2D3 ARR milestones

Starting from $1M ARR at seed:

Year Multiple ARR
Seed Starting $1M
Year 1 3× $3M
Year 2 3× $9M
Year 3 2× $18M
Year 4 2× $36M
Year 5 2× $72M

The exact starting point varies — many T2D3 conversations begin at the Series A close (~$2–5M ARR). The principle is the same: triple ARR twice, then double it three times.

Do you need to hit T2D3 exactly?

No. T2D3 is a benchmark for top-decile SaaS companies raising institutional venture funding. The vast majority of successful SaaS businesses don't hit T2D3 and build profitable, valuable companies anyway.

The benchmark becomes relevant when: - You're raising a Series A or B from top-tier VCs - Your investors are benchmarking you against the venture portfolio - You're building toward an IPO or large strategic exit

Bootstrapped or venture-lite SaaS? A 40–60% YoY growth rate at $2–5M ARR is excellent.

Why early-stage growth must be faster

The T2D3 framework front-loads the hardest growth (tripling) because it's actually easier to triple from $1M than from $30M. At $1M ARR, a single enterprise contract or viral product-led growth spike can triple revenue. At $30M, you need an entirely different go-to-market engine.

This is the "treadmill" problem: the growth rate required to double from $36M to $72M in a year is a massive absolute number — $36M in net new ARR — while the percentage looks identical to year 1.

Calculate your growth rate

Use the ARR Growth Rate Calculator to see your current YoY growth rate, your trajectory to any target ARR, and how you compare to the T2D3 milestones.

Next step: Track ARR with Baremetrics → Affiliate link

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SaaS ARR Growth Rate Benchmarks by Stage (2026)

What's a good ARR growth rate? Industry benchmarks for YoY ARR growth by ARR stage — from seed to Series C and beyond.

ARR growth rate benchmarks vary significantly by company stage. What constitutes "excellent" at $500k ARR would be deeply concerning at $50M ARR — the denominator grows, and maintaining high percentage growth requires an ever-larger new ARR engine.

Growth rate benchmarks by ARR stage

ARR stage Below average Average Good Excellent
< $1M < 50% 50–100% 100–200% 200%+
$1M–$3M < 60% 60–100% 100–150% 150%+
$3M–$10M < 50% 50–80% 80–120% 150%+
$10M–$30M < 40% 40–60% 60–100% 100%+
$30M–$100M < 25% 25–40% 40–60% 70%+
$100M+ < 20% 20–30% 30–50% 50%+

Source: Benchmarks derived from Bessemer Venture Partners State of the Cloud, OpenView Product Benchmarks, and public SaaS company filings (2022–2026).

The "Rule of X" for later-stage SaaS

For Series B and beyond, investors increasingly use the Rule of X (or Rule of 40 for profitability-focused companies):

Rule of 40 = ARR growth rate + free cash flow margin ≥ 40%

A company growing 60% YoY with -20% FCF margin scores 40 (passing). One growing 25% with 15% FCF margin also scores 40. Both are considered healthy by different stakeholders.

Rule of X (Bessemer) applies a multiplier to revenue growth vs profitability: growth rate × 2 + FCF margin ≥ 40. This weights growth more heavily for high-multiple markets.

The NRR multiplier

Companies with Net Revenue Retention > 120% can sustain lower new-logo acquisition growth because their existing base compounds. At 120% NRR, even 30% new customer growth delivers effective 56% ARR growth.

Use the ARR Growth Rate Calculator to see where your current growth rate sits against these benchmarks.

Next step: Track ARR with Baremetrics → Affiliate link

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ARR vs MRR — When to Use Which Metric and Why

ARR and MRR measure the same thing at different time scales. Here's when each metric matters, how they differ in practice, and which one investors care about.

ARR (Annual Recurring Revenue) and MRR (Monthly Recurring Revenue) are not competing metrics — they measure the same thing at different time scales. ARR = MRR × 12. But which one you report publicly, and how you define it internally, has real implications for how your business is perceived and managed.

When to use MRR

MRR is your operational metric. You use it for: - Monthly reporting to the team and board - Cohort analysis (tracking customer cohorts over time) - Growth rate calculations (MoM growth is more granular than YoY) - Churn tracking (monthly churn rate is directly comparable to MRR loss)

MRR gives you faster feedback loops. A product change that improves trial conversion shows up in MRR within 30 days.

When to use ARR

ARR is your investor and external metric. You use it for: - Fundraising — VCs benchmark you against ARR milestones ($1M, $3M, $10M ARR) - Valuations — SaaS companies are valued at ARR multiples (5–15× ARR for high growth) - Hiring — senior sales and marketing leaders use ARR to gauge company scale - Public comparisons — public SaaS metrics are almost always quoted in ARR

The normalization problem

ARR normalizes annual and monthly contracts to an apples-to-apples comparison. A customer paying $12,000/year annually and a customer paying $1,000/month are worth the same ARR. Without normalization, you'd undercount annual customers in any given month.

Most SaaS teams track MRR as their primary metric and derive ARR for external communication.

What counts in ARR?

Only committed, recurring revenue counts: - Monthly subscriptions ✓ - Annual contracts (normalized to monthly) ✓ - Professional services ✗ (one-time, not recurring) - Usage-based revenue (variable, so only committed base) ✗ or ½-credit

Use the ARR Growth Rate Calculator to track your YoY ARR growth rate and project your ARR trajectory over 3 and 5 years.

Next step: Track ARR with Baremetrics → Affiliate link

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Track ARR with Baremetrics →