RevenueMetric 2 of 35

ARRAnnual Recurring Revenue

MRR projected over a year. The board metric.

A forward-looking yearly view of recurring revenue, assuming today's MRR persists for 12 months. ARR is the standard unit for valuation conversations, headcount planning, and investor benchmarking.

Formula

ARR = MRR × 12

Worked example

MRR of $42,000 → ARR = $504,000.

Benchmark

Series-A readiness

Strong

$1M+ ARR

Common entry

$500K–$1M

Pre-traction

<$200K

Why it matters

ARR is the lingua franca of SaaS. Valuations, ARR multiples, employee comp benchmarks — all reference ARR. But ARR is a projection, not realised revenue: a 50% churn next month would invalidate today's ARR. Always pair it with NRR and churn when reporting externally.

Common mistakes

Reporting ARR but not the churn-adjusted version that investors actually care about.
Calculating ARR from a single peak month rather than a trailing average.
Counting non-recurring revenue (services, hardware) in ARR to inflate the headline.

Tracked in FlowMRR

Dashboard → ARR KPI card, always MRR × 12 from the same Stripe-sourced data.

Track ARR in FlowMRR