# ARR

> Annual recurring revenue: the yearly run rate of active subscriptions, usually MRR × 12.

Source: https://sporetag.com/glossary/arr
Also called: annual recurring revenue, MRR vs ARR.

ARR = [MRR](https://sporetag.com/glossary/mrr) × 12. A business with $8,500 of MRR has an ARR of $102,000. Like MRR, it counts subscriptions that are paying now, and leaves out one-time fees, usage-based charges and free plans.

| | MRR | ARR |
|---|---|---|
| Measures | Monthly run rate | Yearly run rate |
| A $1,200 yearly plan adds | $100 | $1,200 |
| Common in | Monthly plans, early SaaS | Annual contracts, board reporting |

Neither is cash or revenue: a yearly plan paid today adds its whole price to this month's revenue and only a twelfth of it to MRR. Use MRR to see monthly moves (new, expansion, contraction, [churn](https://sporetag.com/glossary/churn)) and ARR when contracts are yearly. See the [SaaS metrics dashboard](https://sporetag.com/guides/saas-metrics-dashboard).

## Related terms

- https://sporetag.com/glossary/mrr
- https://sporetag.com/glossary/churn
- https://sporetag.com/glossary/retention-rate