Annual Recurring Revenue (ARR)

Annual Recurring Revenue (ARR) is a metric used by subscription-based businesses to measure the predictable revenue they can expect from their customers over a year. It reflects the total yearly income generated from active subscriptions or contracts, excluding one-time sales. ARR provides insight into the company's financial health, growth trends, and stability by focusing on consistent revenue streams. It helps businesses forecast future earnings, make strategic decisions, and assess performance over time. Essentially, ARR simplifies understanding how much revenue a company can reliably count on receiving annually from its existing customer base.