BUSINESS SPEAK · ARR
ARR: Annual recurring revenue
Monthly recurring revenue scaled up to a year.
What it means
ARR is MRR × 12. It is a snapshot that shows what a year would bring in if today’s subscriptions simply carried on — not a forecast or a promise.
Where you’ll meet it
- Investors and buyers quote ARR when they value subscription businesses, often as a revenue multiple.
- Because it assumes nothing changes, ARR can overstate a business that is losing customers.
Worked example
Scenario: The same cleaning service has MRR of 6,280.
- ARR = MRR × 12
- 6,280 × 12 = 75,360
Answer: ARR is 75,360 per year.