ARR (Annual Recurring Revenue)


The revenue that a company expects to earn annually from subscriptions.

Why it matters

ARR is a forward-looking metric that is used very frequently by investors to understand how much recurring revenue a company expects to bring in during the coming year based on existing contracted customers. For B2B SaaS companies, ARR is one of the most important metrics tracked by management and investors, as it shows the stability of revenue and is a significant indicator of a company’s growth and health.