Thankfully, this metric is very simple to explain. ARR metric, or Annual Run Rate, is essentially your MRR value multiplied by 12.
Much like Monthly Recurring Revenue, ARR tells you how much revenue your business is generating within a fixed time frame (in this case annually), based on your current subscriptions.
And much like MRR, it is not an indicator of how much $ will flow into your accounts, month after month (or year after year), as the actual number will be influenced by many factors, not baked into this metric, such as future cancellations, upgrades or downgrades.
It is a simple metric, very easy to understand for almost anyone (how much your business makes in a year), which is why it’s so popular among business owners wanting to track their venture’s health.
Want to track your ARR? Sign up to MRR.io and you’ll be able to track it effortlessly (with our one-click integration for Stripe and Paddle).
Try out MRR.io for free for 30 days, no credit card required, no strings attached. I’m sure you will find it valuable to be able to check Monthly Recurring Revenue and other metrics for your business in real time, whether you need to know the MRR value for Stripe, Paddle or another payment processor.
Try out MRR.io for free!