Annual Recurring Revenue (ARR) and Monthly Recurring Revenue (MRR) are the standard metrics for measuring revenue in SaaS and subscription businesses. MRR is the predictable monthly revenue from active subscriptions. ARR is MRR multiplied by 12. These metrics exclude one-time revenue and are the basis for SaaS valuations.
Definition
Understanding ARR & MRR
Annual Recurring Revenue (ARR) and Monthly Recurring Revenue (MRR) are the standard metrics for measuring revenue in SaaS and subscription businesses. MRR is the predictable monthly revenue from active subscriptions. ARR is MRR multiplied by 12. These metrics exclude one-time revenue and are the basis for SaaS valuations.
Related Concepts
Related Terms
- Churn rate
- Net revenue retention
- SaaS valuation
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