Annual Recurring Revenue (ARR)

SaaS

The annualized value of recurring subscription revenue, giving a full-year view of predictable income.

Why it matters

ARR is the standard metric investors use to value SaaS companies. It smooths out monthly fluctuations and provides a clear picture of business scale and growth trajectory.

Formula

ARR = MRR x 12

Multiply your current MRR by 12. Only include recurring revenue — exclude one-time payments, setup fees, and professional services.

Calculator

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Annual Recurring Revenue
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What's a good ARR?

Depends on stage

Seed: $100K-$500K, Series A: $1M-$5M, Series B+: $10M+

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