What is Annual Recurring Revenue?
Annualized value of recurring subscription revenue.
How to calculate it
Calculate Annual Recurring Revenue as: MRR × 12. Pull the inputs from your connected data and track the trend over time in your dashboard.
Examples
Example 1
$20,000 MRR x 12 = $240,000 ARR.
Example 2
$30,000 MRR annualizes to $360,000 ARR. Growing to $540k over the year is 50% ARR growth, a healthy pace for an early-stage company.
Why it matters
Annual recurring revenue (ARR) is the annualized value of recurring subscription revenue and is the headline metric for SaaS scale and valuation. It smooths monthly noise and is the figure investors and boards anchor on. As with MRR, counting non-recurring services in ARR inflates it and misleads stakeholders.
Benchmark context
The growth rate matters more than the absolute level; benchmarks like the Rule of 40 combine ARR growth with profitability to assess health.
Common pitfalls
Counting non-recurring services in ARR.
Related KPI guides
Turn KPI definitions into governed dashboards
Metricwise helps teams define metrics once, reuse them across dashboards, and ask trusted business questions in plain English.
Get Started