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Growth

ARR

Also called: annual recurring revenue

Definition

What ARR means

ARR, or annual recurring revenue, is the yearly value of your subscription revenue, usually calculated as monthly recurring revenue multiplied by twelve months.

A founder filling out an investor update or a directory's 'company stage' field often needs one clean ARR number instead of explaining monthly ups and downs month by month across a spreadsheet.

ARR is not the same as total lifetime revenue, and it does not include one-time fees, services revenue, or revenue you already expect to lose to cancellations next quarter.

To get your current ARR, take your most recent stable month of recurring revenue and multiply by twelve, then adjust for any known upcoming price or plan changes.

When it matters

Why this matters for builders

Investors and some directories ask for ARR to understand scale.

Watch out

Mistake builders make often

Founders sometimes report ARR from their single best month ever, instead of a representative recent month, which overstates the number to investors or directories.

Next step

What to do now

Use the MRR Calculator to get a clean monthly number first, then multiply by twelve for a defensible ARR figure.