Annual Recurring Revenue ARR
The value of a subscription business's recurring revenue normalized to a full year, excluding one-time fees.
What it is
Annual Recurring Revenue is the yearly value of the contracted, repeating revenue a subscription company expects from its customers at a point in time. It counts only recurring items like subscriptions and committed usage, and excludes one-time charges such as setup fees, professional services, or hardware. It is a snapshot of run-rate revenue, not an accounting figure from the income statement.
Why it matters
ARR shows the durable, predictable core of a SaaS business better than a single quarter of total revenue, which can be distorted by one-off sales. Investors track ARR growth and its trajectory to judge how fast the recurring base is compounding. Because it is non-GAAP and self-defined, the exact components a company includes should always be checked.
How it's calculated
Take the recurring revenue earned in a month or quarter and annualize it, or sum the annualized value of all active recurring contracts; always strip out non-recurring fees.
How Quintarthai uses it
When a company reports ARR, you can sanity-check it against the reported GAAP revenue trend in the Financials tab of its company deep-analysis page.