ARR: Annual Recurring Revenue

ARR (Annual Recurring Revenue) is the normalised yearly value of all active subscriptions, the headline metric SaaS companies use to measure size and growth.

What is ARR?

ARR excludes one-time fees and counts only contracted recurring revenue. It is the basis for SaaS valuations, board reporting, and quota planning.

Frequently Asked Questions

What is the difference between ARR and MRR?: ARR is annual; MRR is monthly. ARR = MRR × 12.
What is the difference between ARR and revenue?: ARR is forward-looking and only counts subscriptions. Recognised revenue is GAAP-accounting and includes one-time fees.