ARR vs MRR
ARR and MRR are the same idea on two different clocks. Both describe recurring subscription revenue — one in monthly cadence, one annualised.
The key difference: MRR is what you bill per month right now; ARR is that same recurring revenue restated for a full year.
| Dimension | ARR | MRR |
|---|---|---|
| Time frame | Annual | Monthly |
| Best for | Annual contracts, board updates, valuation | Monthly billing, growth tracking, cohort analysis |
| Math | MRR × 12 (or sum of annual contract values) | ARR ÷ 12 |
| Who uses it | Investors, finance, exec team | GTM teams, ops, growth |
| What it ignores | One-time fees, services, churn within the year | Annual seasonality |
When to use ARR
Use ARR when your contracts are annual, you're raising or reporting to a board, or you need a stable headline metric.
When to use MRR
Use MRR when most billing is monthly, when you're tracking week-by-week growth, or when you need to spot churn early.
FAQs
Are ARR and MRR the same number?
They describe the same revenue, just on different time scales. ARR equals MRR × 12 for pure subscription businesses.
Should one-time fees count in ARR?
No. ARR and MRR should only include recurring subscription revenue — implementation fees, services, and one-time charges belong in a separate line.
Which do investors care about more?
Most SaaS investors at Series A+ benchmark on ARR. Early-stage and PLG companies often still report MRR because growth is faster on a monthly basis.