SaaS metrics
What is ARR (Annual Recurring Revenue)?
ARR is Annual Recurring Revenue: the predictable amount a subscription business bills over 12 months.
ARR (Annual Recurring Revenue) is the annualized version of MRR and is typically used by companies with longer contracts. It gives a macro view of the size of the business's recurring revenue.
As an annual snapshot, ARR is useful for planning, valuation and long-term targets, while MRR is more sensitive for tracking month-to-month changes.
Formula
ARR = MRR × 12Use it in practice
SaaS Simulator
Frequently asked questions
What is the difference between ARR and MRR?
ARR is MRR multiplied by 12 — the same recurring revenue viewed annually instead of monthly.
Do one-off sales count toward ARR?
No. ARR counts only recurring subscription revenue, not one-off sales.