Annual Recurring Revenue (ARR)

Annual Recurring Revenue (ARR)

Annual Recurring Revenue (ARR) is a key metric for SaaS businesses that represents the yearly value of recurring revenue from subscription customers. It's calculated by multiplying Monthly Recurring Revenue (MRR) by 12, providing a long-term view of business performance.

Understanding ARR

Basic Calculation

ARR = MRR × 12

Example

• MRR of $50,000 = $600,000 ARR
• Growing from $1M to $1.2M ARR = 20% annual growth

ARR and Affiliate Marketing

Affiliate Contribution to ARR

• New ARR from affiliates: Track affiliate-driven revenue
• Customer quality: Affiliate customers often have higher retention
• Geographic expansion: Affiliates access new markets
• Cost-effective growth: Lower CAC through affiliate channels

Use our SaaS Commission Calculator to:

• Model commission impact on ARR growth
• Calculate optimal commission rates
• Project long-term ARR effects
• Balance commission costs with growth

Ready to optimize your ARR with affiliate marketing? Use our tools to calculate the impact.