Run Rate
Run rate extrapolates a short period's results to a full year — most commonly the latest month's revenue × 12, or the latest quarter × 4. It answers "what would this year look like if today's performance simply continued?"
Formula
Worked example
Revenue of $210,000 in June implies a $2.52M annual run rate — even if the trailing twelve months only totalled $1.9M because earlier months were smaller.
For subscription revenue, run rate and ARR usually coincide; the difference appears when total revenue includes non-recurring items. A month boosted by one-off services or a usage spike annualises into a flattering fiction — which is why "run rate" claims deserve one follow-up question: what exactly was multiplied by 12?
Run rate is legitimate for fast-growing businesses where trailing figures understate the present. It is misleading for seasonal businesses, where annualising the best month is simply wrong.
Compute it: MRR & ARR calculator