Annual Recurring Revenue (ARR)
Definition
ARR is the annualized value of a company’s recurring subscription revenue, excluding one-time fees and services. It is the headline metric for SaaS fundraising.
How it comes up in fundraising
Investors benchmark rounds on ARR: in 2026, US Series A investors typically look for $1M to $2M ARR growing 2x to 3x year over year.
Frequently asked questions
How is ARR different from revenue?
ARR counts only recurring, contracted revenue annualized; total revenue can include one-time services, hardware, or usage spikes that do not repeat.
How do investors verify ARR?
In diligence they rebuild it from invoices and contracts, so keep your definition clean: no one-time fees, no double-counted pilots.
Round Funded resources
Put this term to work
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