Commerce Glossary

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What is Annual Recurring Revenue (ARR)?

an - nu - al re - cur - ring rev - e - nue
Annual Recurring Revenue is a metric that shows the amount of money a contracted subscription is generating during a one year period.
How Does the Annual Recurring Revenue (ARR) Work?

This metric is calculated by multiplying the amount of recurring revenue a business is generating during a month (also called MRR) by 12. Tracking the Annual Recurring Revenue metric is important in showing the real-time run rate of a subscription business.

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