Annual Recurring Revenue (ARR)

Annual Recurring Revenue (ARR) is a financial metric that refers to the amount of revenue a business expects to receive annually from its customers for its subscription-based products or services. It is calculated by multiplying the number of paying customers by the average annual subscription fee.

ARR is an important metric for recurring revenue businesses as it provides a predictable source of revenue, helps in forecasting future revenue, and provides a clear picture of their financial health and growth potential.