Definition
Total annual recurring revenue divided by the total number of full-time employees.
Formula
Total ARR / Total full-time employee count
How to measure
Divide the company's current ARR by its total headcount, typically excluding contractors, at the same point in time.
Why track it
ARR per employee is a common capital and operational efficiency benchmark used to compare growth-stage companies of different sizes.
Example
A company with $10 million ARR and 40 employees reports $250,000 ARR per employee.
FAQ
- What is ARR Per Employee?
- Total annual recurring revenue divided by the total number of full-time employees.
- How do you calculate ARR Per Employee?
- Total ARR / Total full-time employee count
- Why track ARR Per Employee?
- ARR per employee is a common capital and operational efficiency benchmark used to compare growth-stage companies of different sizes.