Annual Recurring Revenue

Definition

Annual Recurring Revenue (ARR) is the annualized value of a company's recurring subscription revenue, typically from SaaS contracts. It excludes one-time fees, professional services, and non-recurring revenue. ARR is the primary revenue metric for SaaS companies and the most common sizing metric for growth equity investments.

Context

In Ep. 20, Jake Colognesi defines Mamba Growth's investment lens as companies with "$2 to $10 million of recurring revenue" growing 50-100%+ year over year. ARR is the first filter in Mamba's tight investment lens — before retention, profitability, or founder quality are evaluated.

Related Terms

• SaaS — the business model that generates ARR
• Gross Dollar Retention — measures how well ARR is retained
• Investment Lens Definition — ARR range is a core lens criterion