ARR is the predictable annual revenue from subscriptions — simply MRR multiplied by 12.
ARR (Annual Recurring Revenue) is the yearly version of MRR, often used by larger SaaS businesses and investors to assess growth at a higher level. ARR = MRR × 12.
Investors and business owners use ARR to determine valuations and compare year-over-year growth. Healthy ARR growth of 20-40% is often considered strong in the SaaS world, depending on company size.
Just like MRR, customer service plays a direct role in ARR retention: every prevented cancellation preserves a full year of revenue, not just a month.
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