Sales
Definition
Annual Recurring Revenue is the sum of all current customer subscription values expressed annually. ARR excludes one-time fees (onboarding, professional services). It's the key metric for SaaS business valuation and growth tracking.
Key points
- ARR = sum of (each customer's subscription × annualization factor)
- Excludes one-time professional services fees
- Reported as Beginning ARR → New ARR → Expansion ARR → Churned ARR → Ending ARR
- ARR growth rate is the primary SaaS company valuation input
Example
Your business has 100 customers averaging $2k/month. ARR = 100 × $2,000 × 12 = $2.4M.
Stop stitching tools to track this
KamoCRM unifies CRM, communications, and operations — the metrics this term describes become live dashboards in your workspace.