Metrics & Performance
ARR
Annual Recurring Revenue — the annualized value of a company's recurring subscription revenue, the primary top-line metric for SaaS businesses.
ARR (Annual Recurring Revenue) is the most important revenue metric for subscription-based businesses. It represents the predictable, recurring revenue a company expects to generate over a 12-month period. ARR is calculated by multiplying Monthly Recurring Revenue (MRR) by 12, or by summing all annual contract values. VCs use ARR as a key valuation benchmark — early-stage SaaS companies might be valued at 10-20x ARR, while high-growth public companies can trade at 30x+ ARR. ARR should exclude one-time fees, professional services, and other non-recurring revenue. Growth rate (year-over-year ARR change) is often more important than absolute ARR size.