ARR (Annual Recurring Revenue): Measure for recurring revenue

ARR, or Annual Recurring Revenue, is a key metric in subscription-based business models that measures the annual value of recurring revenue from customer subscriptions or contracts. This metric provides companies and investors with a clear insight into financial stability and growth potential by highlighting predictable and sustainable revenue. Optimising ARR is critical for assessing business performance, planning growth strategies and attracting investment as it reflects long-term profitability and customer retention. "New ARR" stands for "New Annual Recurring Revenue" and refers to the amount of recurring revenue a company gains from new customers or upgrades of existing customers within a given period, usually one year. "Total ARR" stands for "Total Annual Recurring Revenue" and refers to the total recurring revenue that a company generates on an annual basis. This figure includes all current contracts and subscriptions, regardless of whether they come from new or existing customers.