Formula
ARR = MRR × 12
ARR
Also known as Annual recurring revenue
ARR is the annualised value of a company's recurring revenue, calculated as monthly recurring revenue multiplied by twelve.
Worked example
€37,800 of MRR is €453,600 of ARR.
Benchmark
The venture-scale reference is T2D3: from about €1M ARR, triple it twice, then double it three times, reaching €100M around year five (Neeraj Agrawal, 2015).
All startup finance benchmarks →ARR is the number used in fundraising and valuation conversations, because it states run-rate rather than a single month. It is a projection of the current month, not a record of the past year.
It only applies to genuinely recurring revenue. Annualising a month that included one-off consulting or a large usage spike produces a figure the company cannot repeat.
Related terms
Keep this number live
Plainhub computes arr from money you record in plain words, so it is current when you need it rather than the night before a board meeting.
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