Annual Recurring Revenue (ARR)

ARR is the number that shows up in board decks, investor updates, and M&A discussions. It represents the annualized run rate of your recurring revenue, and it's the single metric most correlated with SaaS company valuation. Public SaaS companies trade at multiples of ARR, not revenue, not bookings.

ARR vs MRR vs Bookings

• ARR: Current annualized recurring revenue. Snapshot metric. What you'd earn if nothing changed for 12 months.
• MRR × 12: Close to ARR, but can diverge if you have contracts with non-standard terms or seasonal patterns.
• Bookings: Total new contract value signed. Forward-looking. Bookings today become ARR when the contract starts.

ARR Benchmarks

Growth expectations scale with ARR stage:

• $1-10M ARR: 3x year-over-year growth expected by top-tier investors
• $10-50M ARR: 2x YoY is strong. The "triple triple double double" framework lives here.
• $50-100M ARR: 50-80% YoY growth is excellent
• $100M+ ARR: 30-50% YoY puts you in the top quartile

ARR Per Employee

ARR per employee is a key efficiency metric. Best-in-class SaaS companies hit $200-300K+ ARR per employee. Below $100K suggests bloated headcount or pricing problems. RevOps tracks this alongside other efficiency KPIs to flag operational issues before they hit the P&L.

ARR growth is the top-level metric; ACV and NRR explain what's driving it.