Metric
ARR
Also known as: Annual Recurring Revenue
Annual Recurring Revenue — normalized annual subscription revenue, excluding one-off fees.
ARR (Annual Recurring Revenue) is the normalized measure of annual subscription income. A monthly contract of €500 counts as €6,000 ARR; an annual contract of €6,000 also counts as €6,000 ARR.
ARR is the standard metric for SaaS valuation and growth: VCs and investors look at ARR growth (year-over-year), Net New ARR per quarter, and the ratio between ARR and burn (Burn Multiple).
Key milestones in B2B SaaS: €1M ARR = product-market fit; €10M ARR = Series B; €100M ARR = IPO territory.