ConverterHub

Run Rate Calculator

Turn a few months of revenue into an annual and quarterly run rate.

How it is calculated

The tool turns the average month of your period into a yearly figure. monthly = period_revenue ÷ period_months; annual run rate = monthly × 12; quarterly run rate = monthly × 3. The growth-adjusted figure assumes revenue rises by a constant percentage each month, with the first month at the current monthly level: monthly × ((1 + g)12 − 1) ÷ g, where g = growth% ÷ 100. The growth field is optional: left empty it counts as 0%, and the growth-adjusted figure then equals the annual run rate; a negative growth shrinks it. Revenue cannot be negative, months must be above zero and growth must be above −100%, otherwise no result is shown. Seasonality is not modelled.

Worked example

A business earned 270,000 over the last 3 months and expects 2% growth per month. Monthly revenue: 270,000 ÷ 3 = 90,000. Annual run rate: 90,000 × 12 = $1,080,000.00. Quarterly run rate: 90,000 × 3 = $270,000.00. Growth-adjusted annual: 90,000 × ((1.0212 − 1) ÷ 0.02) = 90,000 × 13.412 = $1,207,088.08. Compounding 2% a month adds about 127,000 to the flat figure.

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Common mistakes

  • Entering the period length in the wrong unit. A quarter is 3 months, not 1; using 1 would triple the run rate.
  • Extrapolating from a peak period. A holiday quarter or a one-off contract multiplied by 4 overstates the year, because the run rate assumes every month looks like the average of your period.
  • Treating the figure as a forecast. It describes the current pace, and growth, churn or seasonality can move the actual year well away from it.
  • Entering annual growth in the monthly growth field. 24% a year is roughly 1.8% a month, not 24; typing 24 compounds 24% every month and the growth-adjusted figure jumps to about $4.58 million here.
  • Including one-off or non-recurring income. A run rate is most meaningful when the revenue repeats, such as subscriptions.

About this calculator

Run rate extrapolates a full year’s revenue from a shorter period of actual performance: Annual Run Rate = Revenue in Period x (12 divided by Months in Period), so a company that earns 250,000 dollars in a single month has a 3,000,000 dollar annualized run rate. The same logic scales a quarter’s revenue by 4 to get an annual figure, and an optional monthly growth rate lets you compound the pace over the year instead of holding it flat.

Startups and growing companies use run rate to communicate momentum before a full fiscal year of data exists — it’s especially common shorthand in SaaS, where ARR (annual recurring revenue) is essentially a run rate calculation on recurring subscription revenue. The catch is that run rate assumes the recent period’s pace holds steady for the rest of the year, which overstates the picture for seasonal businesses (a strong holiday-quarter retailer will badly overestimate its annual run rate if extrapolated from Q4 alone) and understates it for companies growing quickly month over month.

This calculator takes your revenue for a recent period and its length and projects the annual and quarterly run rate, plus a growth-adjusted annual figure if you enter an expected monthly growth percentage.

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