Annual Recurring Revenue (ARR) is the annualized value of subscription contracts — the standard metric for SaaS businesses. Calculated as monthly recurring revenue × 12, or by summing annual contract values of all active subscriptions. Excludes one-time fees and professional services. ARR growth (year-over-year %) is the dominant SaaS valuation metric — VCs and public market investors pay revenue multiples on ARR (5-30× depending on growth rate). Net Revenue Retention (NRR) above 100% means existing customers expand faster than churn, multiplying growth. Best-in-class SaaS achieves 120-140% NRR. ARR replaces traditional revenue metrics for subscription businesses.
Article
Break-Even Point
Break-even point is the level of sales where total revenue equals total costs — zero profit, zero loss.…
Budget vs Actual
Budget vs Actual (BvA) variance analysis compares budgeted financial performance to actual results, identifying gaps and their drivers.…
Burn Multiple
Burn Multiple is a venture capital metric: Net Cash Burn / Net New ARR — measuring how efficiently…
Burn Rate
Burn rate is the rate at which a startup spends cash beyond what it generates from operations, expressed…
CAC
Customer Acquisition Cost (CAC) is total sales and marketing spend divided by new customers acquired in a period.…
CAGR
Compound Annual Growth Rate (CAGR) is the constant annual growth rate that would take a starting value to…
ARR
August 22, 2026 · Aditya Gupta
Corporate Finance
Related terms
Break-Even Point
Break-even point is the level of sales where total revenue equals total costs — zero profit, zero loss.…
Budget vs Actual
Budget vs Actual (BvA) variance analysis compares budgeted financial performance to actual results, identifying gaps and their drivers.…
Burn Multiple
Burn Multiple is a venture capital metric: Net Cash Burn / Net New ARR — measuring how efficiently…
Burn Rate
Burn rate is the rate at which a startup spends cash beyond what it generates from operations, expressed…
CAC
Customer Acquisition Cost (CAC) is total sales and marketing spend divided by new customers acquired in a period.…
CAGR
Compound Annual Growth Rate (CAGR) is the constant annual growth rate that would take a starting value to…
