Glossary
Annual recurring revenue
Annual recurring revenue, or ARR, is the value of a business's recurring contracted revenue expressed as an annual figure, with monthly recurring revenue, or MRR, being the same measure over a month.
Also called arr, mrr, monthly recurring revenue.
Both assume revenue repeats predictably, which is why they were designed for subscriptions with a fixed fee.
Usage-based revenue does not repeat on its own, so applying ARR to it requires stating an assumption: committed amounts only, or trailing consumption annualised. The two produce very different numbers, and businesses should be explicit about which they report.