Definition
Annual Recurring Revenue (ARR) is the total predictable revenue generated annually from subscription-based customers, excluding one-time payments or variable fees.
Related Services
ARR is a key performance indicator in SaaS businesses, subscription models, and investor relations. It is used in financial forecasting and growth strategy planning.
Problem and Application
Challenges in ARR calculation arise from accounting for churn, upgrades, or downgrades. ARR helps businesses track predictable income and plan for long-term growth.
Conclusion
ARR is a vital metric for subscription-based businesses, providing a clear picture of predictable revenue and aiding in strategic financial planning.
