ARR (Annual Recurring Revenue)

Annualized run-rate of subscription or recurring contract revenue.

In depth

Calculated as monthly recurring revenue × 12. Standard SaaS metric. ARR growth rate is the most-watched SaaS performance indicator. Net New ARR (gross adds minus churn) reveals true momentum.

Related terms

Deferred Revenue

Cash received for goods or services not yet delivered — a liability until earned.

Revenue

Top-line sales — total amount earned from delivering goods or services.

Churn

Rate at which customers cancel or stop using a product.

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