ARR (Annual Recurring Revenue)

Annual Recurring Revenue (ARR) is a key measure used by subscription-based businesses to estimate the predictable revenue they can expect from their customers over a year. It sums up the recurring charges from all active subscriptions, providing a clear view of revenue stability and growth potential. ARR helps companies understand their financial health, forecast future revenue, and make informed strategic decisions. It excludes one-time payments and focuses solely on regular, ongoing income generated through subscriptions, making it a useful metric for assessing long-term performance.