Glossary / ARR
ARR(Annual Recurring Revenue)
Annual recurring revenue (ARR) is the annualized value of a business's recurring subscription revenue. ARR is calculated as MRR multiplied by 12, or as the sum of all annualized contract values. ARR is the standard headline number for SaaS company valuation and reporting because it normalizes month-to-month volatility.
Formula
ARR = MRR × 12, or ARR = Σ (Annual contract value of every active customer)
Example
A SaaS business with $50,000 MRR has $600,000 ARR. If the business adds $10,000 net new MRR this year, that's $120,000 net new ARR — the metric that investors and boards typically watch.
Why it matters
ARR is the unit of SaaS valuation. Multiples of ARR drive valuation conversations. Quarterly ARR growth is the metric investors use to evaluate trajectory.
Related terms
See ARR on your own data
DashViz auto-tracks ARR from your CSV and Excel exports today — native Stripe, QuickBooks, and Shopify connectors are on the roadmap. 14-day free trial, no credit card.