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What Is Annual Recurring Revenue (ARR)?

By Kristi Waterworth – Updated Jun 16, 2025 at 11:37PM

Key Points

  • Annual recurring revenue (ARR) is revenue generated by companies through consistent subscription payments.
  • ARR reflects new customer acquisition, renewals, upgrades, downgrades, and churn.
  • Investors assess ARR to gauge subscription-based revenue trends and company growth.
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