Your recurring subscription revenue expressed as an annual run-rate — simply MRR multiplied by twelve.
ARR = MRR × 12
A business with £3,000 in normalised MRR.
£3,000 × 12 = £36,000 ARR
ARR is the annualised version of MRR. It answers the question "if nothing changed, how much recurring revenue would we book over the next twelve months?" Because it is a run-rate, it reflects your current state, not a historical total.
ARR is the headline number for companies selling annual contracts and the language investors tend to speak in. Crossing milestones like £1M ARR or £10M ARR is shorthand for a stage of maturity.
A common mistake is conflating ARR with total revenue booked. ARR only counts recurring subscription revenue. Services, one-off fees, and usage overages that are not contractually recurring sit outside ARR.
ARR is the standard currency for valuing and benchmarking subscription businesses. It frames growth in annual terms that boards, investors, and acquirers understand, and it is the basis for revenue multiples used in funding and M&A.
The "T2D3" path (triple, triple, double, double, double) describes elite ARR growth from roughly £1M to £100M ARR over five years; most healthy SaaS grow more modestly.
No. ARR is a run-rate of recurring revenue only — current MRR × 12. Annual revenue is the actual total booked over a year, including non-recurring items like services and one-off fees.
Multiply current normalised MRR by 12. If your MRR is £3,000, your ARR is £36,000. Mowt computes both automatically from your MRR.
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