Annual Recurring Revenue (ARR)
This indicates the total recurring revenue a business anticipates receiving from its active customers over a twelve-month period.
This is calculated by multiplying monthly recurring revenue by twelve
(ARR = MRR x 12).
Alternatively, it can be calculated by summing the annualized value of active contracts.
💡
The Truth: ARR is indicative of the size of your revenue engine, not its health. Expansion, churn and retention are what shows whether that engine is durable.