ARR (Annual Recurring Revenue)

MRR multiplied by 12 — the annualised run rate of your recurring revenue.

Example

$8,000 MRR is $96,000 ARR.

Important

ARR is a run rate, not what you actually earned this year. Claiming ARR as revenue when you have been at that level for one month is a red flag in diligence.

Related terms

• MRR (Monthly Recurring Revenue) — Predictable revenue that repeats every month from subscriptions or contracts.
• Revenue — The total money earned from customers before any costs are taken out.

Lessons that explain it

• MRR and ARR — Recurring revenue is the number investors care about most — and the one founders most often calculate wrongly. (10 min)

All 176 terms in the Founder glossary