Annual Recurring Revenue
Annual Recurring Revenue (ARR) is the annualized value of your recurring subscription revenue. It's the single most important metric for SaaS companies and what investors look at first.
If your MRR is $50,000, your ARR is $600,000.
ARR is the north star metric for subscription businesses. It shows predictable, recurring revenue and is the primary valuation driver for SaaS companies. Investors typically value SaaS companies at 5-15x ARR depending on growth rate.
Seed stage
Series A
Series B
Series C+
ARR only counts recurring subscription revenue, not one-time fees like setup costs, professional services, or hardware sales. It represents predictable, repeatable revenue.
Yes, but annualize them. If a customer pays $100/month, they contribute $1,200 to ARR. However, be careful, monthly customers churn at higher rates, so some investors discount them.
Add the full value of annual contracts plus (monthly subscription value × 12) for monthly customers. ARR = Annual Contracts + (Monthly Contracts × 12).
We build real-time dashboards that track ARR and every other metric investors care about. Updated daily. Investor-ready.
