RevenueMetric 2 of 35

ARRAnnual Recurring Revenue

MRR projected over a year. The board metric.

Put this metric to work: explore FlowMRR's recurring revenue analytics to track revenue movements, retention and forecasts from your own account.

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.

Illustrative comparisons

ARR scenarios

These unsourced ranges are illustrative scenarios, not measured industry benchmarks, percentiles or recommended targets. Their qualitative labels are editorial interpretations. Compare your own cohorts using the same segment, period, currency and measurement basis.

Strong

$1M+ ARR

Middle scenario

$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

Presenting ARR as guaranteed future revenue rather than a current run rate — pair it with NRR and churn.
Annualising a one-off revenue spike instead of the current recurring MRR base.
Counting non-recurring revenue (services, hardware) in ARR to inflate the headline.

Track ARR in FlowMRR