Annual Recurring Revenue (ARR): Difference between revisions

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(Created page with "Annual Recurring Revenue (ARR) is a metric used to measure the predictable revenue that a business can expect to receive on an annual basis from its recurring revenue streams. This typically includes revenue from subscriptions or other recurring sources, such as membership fees or contract-based services. In a simplified scenario ARR can be calculated by multiplying a company's Monthly Recurring Revenue (MRR) by 12. However most SAAS companies prefer breaking down the to...")
 
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<math>
<math>
ARR = (MRR \times\ 12) + AOR + TC
ARR = (MRR \times\ 12) + AOR - TC
</math>
</math>


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* Support
* Support


{{RFC_Metric|number=22/0004|title=Annual Recurring Revenue (ARR)|version=0.9|status=proposal|type=metric}}
{{RFC_Metric|number=22/0104|title=Annual Recurring Revenue (ARR)|version=0.9|status=proposal|type=metric}}


== See also ==
== See also ==

Latest revision as of 13:39, 8 December 2022

Annual Recurring Revenue (ARR) is a metric used to measure the predictable revenue that a business can expect to receive on an annual basis from its recurring revenue streams. This typically includes revenue from subscriptions or other recurring sources, such as membership fees or contract-based services. In a simplified scenario ARR can be calculated by multiplying a company's Monthly Recurring Revenue (MRR) by 12. However most SAAS companies prefer breaking down the total figure into some particular customer segments or cohorts ARRs.

Definition

ARR is calculated by multiplying a company's Monthly Recurring Revenue (MRR) by 12, plus the Total Additional Ongoing Revenue (AOR) minus the Total Customer Churn (TC)

Details

Additional Ongoing Revenue (AOR) might include:

  • Training
  • Cross-selling additional services
  • Support

Standardization Status

Request for Comments (RFC): 22/0104 - Annual Recurring Revenue (ARR)
Type: metric
Version: 0.9
Status:proposal

See also

Sources

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