What is Recurring Revenue (ARR)?

  • SaaS

Annual Recurring Revenue (ARR) is the total predictable revenue your SaaS business expects to earn from subscriptions over a year. It’s calculated by multiplying your Monthly Recurring Revenue (MRR) by 12, or by dividing the total contract value by the number of years for multi-year deals. ARR excludes one-time fees and focuses only on recurring income, making it a key metric for tracking growth and forecasting future revenue.

R&D Offer Quiz

Step 1 of 3

Answer to find out if you're eligible for R&D tax credits.

Do the activities performed relate to a new or improved business component’s function, performance, reliability, quality, or composition?(Required)
For Example: A mid-sized packaging company develops a slightly modified cardboard box design to improve its stacking strength (reliability) for warehouse storage, involving minor adjustments to the corrugation pattern to reduce collapse under standard weight loads.
Is your company trying to discover information to eliminate uncertainty concerning the capability or method for developing or improving a business component?(Required)
For Example: A furniture manufacturer investigates whether a cheaper wood adhesive can hold joints as effectively as the current one during assembly, testing bond strength to resolve doubts about its capability in standard production lines.
Do the activities performed constitute a process of experimentation?(Required)
For Example: An auto parts supplier runs a series of bench tests on different lubricant formulations to find one that reduces friction in engine bearings more effectively, systematically comparing wear rates over simulated operating cycles.