Definition
The annualized value of recurring revenue, typically calculated as monthly recurring revenue multiplied by twelve.
Why it matters for growth
ARR is the standard headline number investors and boards use to compare SaaS company scale and growth rate year over year.
Example
A company with $50,000 in MRR reports $600,000 in ARR to its board.
FAQ
- What is Annual Recurring Revenue (ARR)?
- The annualized value of recurring revenue, typically calculated as monthly recurring revenue multiplied by twelve.
- Why does Annual Recurring Revenue (ARR) matter for growth?
- ARR is the standard headline number investors and boards use to compare SaaS company scale and growth rate year over year.
- What is an example of Annual Recurring Revenue (ARR)?
- A company with $50,000 in MRR reports $600,000 in ARR to its board.