SaaS Glossary

Basic defenitions of acronyms commonly used in product management and sales organizations, and Software-as-a-Service industry

Annual Recurring Revenue

ARR, MRR, if you don't just get crazy having to retain and pronounce all these acronyms, then you might have a slight chance to survive in the Software as a Service Industry.  

ARR is your Annual Recurring Revenue. Depending on your pricing model  (yearly, monthly, or both). It is one of the leading business metrics you will have to follow to understand if your company generates money. That's also one of the main numbers a Venture Capital or any investor will take a look at to know if they should invest in your business or not.

ARR = sum of all annual subscriptions (or contracts) during the calculated year+ (sum of all monthly subscriptions/contracts during the calculated year)*12

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