Annual Recurring Revenue (ARR)
The annualized value of recurring subscription revenue, giving a full-year view of predictable income.
Why it matters
ARR is the standard metric investors use to value SaaS companies. It smooths out monthly fluctuations and provides a clear picture of business scale and growth trajectory.
Formula
Multiply your current MRR by 12. Only include recurring revenue — exclude one-time payments, setup fees, and professional services.
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What's a good ARR?
Seed: $100K-$500K, Series A: $1M-$5M, Series B+: $10M+
Related metrics
MRR
SaaSThe predictable revenue a business expects to earn every month from active subscriptions.
Growth Rate
FinanceThe percentage increase in revenue over a specific period, typically measured month-over-month or year-over-year.
Churn Rate
SaaSThe percentage of customers or revenue lost over a given period, typically measured monthly.