ARR: your recurring revenue over a year
ARR means annual recurring revenue. It is MRR times twelve: what the subscriptions you have today would bring in over a year if nothing changed.
The formula
ARR = MRR × 12
An example
With €609 MRR, ARR is €7,308. It is a snapshot, not a forecast: next month's new customers and cancellations will move it.
How Sumly counts it
- ARR is shown under MRR on the overview, worked out from the same subscriptions.
- The outlook page goes further and projects revenue from the growth and churn of the last months.
Mistakes that make it lie
- Calling a year of past revenue ARR. That is trailing revenue; ARR only counts what repeats.
- Treating ARR as a promise. A yearly plan cancelled today still counts until it is, and none of it is guaranteed.
Questions
When is ARR more useful than MRR?
When most customers pay yearly, or when you talk with investors, who often think in years.
Read next
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