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All glossary terms

Solo builder glossary

Annual recurring revenue (ARR)

ARR is the annualized value of recurring subscription revenue at a point in time. It is commonly used for subscription businesses with annualized recurring contracts.

Join Rudra · Definition and worked example

Formula or example

ARR = monthly recurring revenue × 12. Example: $8,000 MRR implies $96,000 ARR when revenue is stable and recurring.

Apply it

Use the Net Revenue Retention Calculator to work through your assumptions. See also the related guide.

Related statistic

Top-decile SaaS annual growth by ARR band (ChartMogul, 2023). Check its source population and definitions before applying it to your business.

Related terms

Sources

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