Acronyms Dictionary
ARR
Definition
Annual Recurring Revenue. A metric used by SaaS and subscription businesses to measure predictable revenue.
Deep Dive
ARR is the cornerstone metric for subscription-based businesses. it represents the total value of all active, recurring contracts projected over a one-year period. It provides a clear snapshot of the company's growth health and predictable income.
Examples & Use Cases
- 1A SaaS startup reaching the milestone of $1 million in ARR
- 2Forecasting next year's budget based on current ARR and expected churn
- 3Using ARR growth as a primary valuation metric during a fundraising round
Related Terms
MRRChurnSaaS