# Annual Recurring Revenue (ARR)

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- Trust policy: core-trust-policy-v1-2026-06-22

## Short Definition

ARR normalizes recurring subscription revenue into an annualized revenue run rate.

## 一言でいうと

ARR normalizes recurring subscription revenue into an annualized revenue run rate.

## 計算方法

- Basic formula | ARR = MRR x 12 | Annualize monthly recurring revenue to understand current recurring scale
- ARR Bridge | Opening ARR + New ARR + Expansion ARR - Contraction ARR - Churn ARR = Ending ARR | Decompose growth drivers
- Short-term contracts and usage-based revenue require a fixed company policy and should not inflate recurring revenue.

## 含めるもの / 含めないもの

- Include | Active subscription fees, annual contracts, annualized monthly contracts, recurring upsells | They represent the predictable revenue base
- Exclude | Setup fees, implementation services, one-off consulting, taxes, refunds, one-time overages, hardware revenue | They inflate recurring revenue with non-recurring items

## 意味

Annual Recurring Revenue represents the annualized revenue expected from active recurring contracts. It is not total revenue or cash collected; it isolates the predictable recurring base used for SaaS growth, investor reporting, hiring plans, and budget decisions.

## 役立つ場面

- Use it to explain the annual scale and growth of a SaaS or recurring-revenue business.
- Use it as an input for investor reporting, budgeting, hiring, and customer success capacity.

## 使い方のポイント

- Define contract scope, period, discounts, taxes, refunds, inactive accounts, and downgrades before comparing over time.
- Read ARR with MRR, Churn Rate, NRR, CAC, and LTV rather than in isolation.

## 変動要因 / ドライバー

- New ARR | Added by new customers | Read with CAC and sales productivity
- Expansion / Contraction ARR | Moves with expansion or downgrades from existing customers | Reflects PMF, pricing, and adoption
- Churn ARR | Lost through cancellations | Separate logo churn from revenue churn to find leakage

## 判断するときの注意点

- Including one-time revenue overstates business predictability.
- Improved cash collection from annual prepayment is not the same as ARR growth.

## よくある誤解 / 落とし穴

- ARR growth can look strong while high churn or contraction weakens the base.
- Definitions vary by company, so the calculation policy must travel with the number.

## 最小例

Example: if MRR is 10 million yen, basic ARR is 120 million yen. One-time setup fees and refunds are excluded.

## 似ている言葉との違い

- Revenue | Accounting revenue | ARR is an operating metric for annualized recurring revenue
- Cash Flow | Movement of cash | ARR is the scale of contracted recurring revenue

## 一緒に見る指標

- MRR | Tracks monthly movement | ARR shows annualized scale
- NRR / Churn Rate | Shows retention, expansion, and churn from existing customers | Judges ARR quality

## FAQ

### Is ARR the same as revenue?

No. ARR is an operating metric for annualized recurring revenue and may not match accounting revenue or cash collected.

### When should ARR be used?

Use it when explaining recurring scale, growth quality, and the basis for fixed-cost investment.

## Sources

- YogoQ Core business foundation editorial baseline

## Limitations

This page is reference information for research and learning. For accounting, legal, finance, health, security, or other individual decisions, confirm against primary sources or qualified professionals.

- Public pages support general understanding and practical context; they are not professional advice for individual cases.
- Fast-changing information such as regulations, accounting standards, prices, product specs, and legal requirements should be checked against primary sources before final decisions.
- Even when AI-assisted drafting or audit is used, publication relies on quality gates and human-readable evidence.