ARR

Definitions

1. Annual Recurring Revenue — the annualized value of active subscriptions, the single most important metric for SaaS businesses. Calculated by multiplying MRR (Monthly Recurring Revenue) by 12. Excludes one-time fees, services revenue, and churned customers.

   In plain English: How much subscription revenue a software company earns per year from its current customers.

   Example: "We crossed $10M ARR this quarter — at our current growth rate, we should hit the $100M milestone in 18 months."

Related Terms

• Churn Rate
• Total Addressable Market
• Unit Economics
• Net Dollar Retention
• Land and Expand
• Pricing Page
• Monthly Recurring Revenue
• MRR
• Annual Recurring Revenue
• Net MRR
• Net Revenue Retention