ARR (Annual Recurring Revenue)

ARR (Annual Recurring Revenue)

The annualized value of a subscription business's recurring revenue at a point in time.

What ARR (Annual Recurring Revenue) means

ARR = MRR × 12. It's the standard top-line metric for SaaS. Investors evaluate ARR alongside growth rate, net revenue retention, and gross margin.

One-time services, setup fees, and usage overage do not count toward ARR — only committed recurring contract value does.

Related fundraising guides (40)

• Board of Directors
• Burn Rate
• CAC (Customer Acquisition Cost)
• Cap Table
• Convertible Note
• Dilution
• Discount (SAFE / Note)
• Due Diligence
• Friends and Family Round
• Gross Margin
• KPI (Key Performance Indicator)
• Liquidation Preference
• LTV (Customer Lifetime Value)
• MFN Clause (Most-Favored Nation)
• MRR (Monthly Recurring Revenue)
• Option Pool
• Oversubscribed Round
• Post-Money Valuation
• Pre-Money Valuation
• Pre-Seed Round
• Pro-Rata Rights
• Revenue Multiple
• Roll-Up Vehicle (RUV / SPV)
• Runway
• SAFE (Simple Agreement for Future Equity)
• Seed Round
• Series A
• Series B
• Term Sheet
• Valuation Cap
• Vesting
• Go-to-Market
• Grant Funding
• Grants vs Equity
• Grants vs VC
• GraphQL vs REST
• Gross Margin
• Growth Loops
• GTM Motion
• GTM Strategy

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