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Stripe ARR (excl. Canceled Subscriptions)

ARR (excl. Canceled Subscriptions) stands for Annual Recurring Revenue excluding Canceled Subscriptions, a metric that calculates the total amount of revenue a SaaS company generates from its recurring subscription fees in a given year. It's a key metric to measure the growth and predict the future revenue of a SaaS business.

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ARR (excl. Canceled Subscriptions) $138,000 Start tracking this metric
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What Is Annual Recurring Revenue (ARR)?

Annual Recurring Revenue (ARR) is a financial metric commonly used by businesses with a recurring revenue model to measure the predictable and recurring revenue they generate through subscription-based products over a 12-month period.
The metric is popular across all industries with a subscription-based model, as it provides a snapshot of financial health and growth potential.
ARR is often used in conjunction with other KPIs like customer acquisition cost (CAC), customer lifetime value (CLTV), and churn rate.

How to Calculate Annual Recurring Revenue (ARR)

To calculate ARR, you need first to determine your business’s average monthly recurring revenue (MRR) and then multiply it by 12 to represent a full year.

This isn’t the only formula you can use, but it’s the most common one.

Here’s how it goes:

Annual Recurring Revenue (ARR) = Monthly Recurring Revenue (MRR) * 12

Let’s break down the elements here.

MRR is the average monthly revenue generated by all active subscribers or customers. To calculate MRR, sum up the revenue generated from each customer on a monthly basis.
Say you run a SaaS company and have the following monthly revenue from subscriptions over the past three months:

  • Month 1: $10,000
  • Month 2: $12,000
  • Month 3: $11,500

To calculate the MRR, add up the revenue from each month and divide by the number of months:
MRR = (10,000 + 12,000 + 11,500) / 3 = $11,500

Now, to calculate the ARR, multiply the MRR by 12:
ARR = $11,500 * 12 = $138,000

So, the Annual Recurring Revenue (ARR) for your company would be $138,000 based on the given monthly revenue data.

It’s important to note that ARR calculations assume a constant revenue stream without accounting for any fluctuations or changes in customer subscriptions.
Additionally, this calculation does not consider expansion revenue from upsells, cross-sells, or additional one-time fees.

What Is a Good Annual Recurring Revenue (ARR) Growth Rate?

There are a lot of different factors that influence a company’s ideal ARR, but the two main ones are the specific industry and the stage of the company.

For example, subscription-based businesses in ecommerce and healthcare technology typically consider a 30-40% growth rate healthy. On the other hand, SaaS companies usually aim for annual growth rates of 50% to 100%, depending on their size and maturity. For example, early-stage startups experience higher growth rates during the initial part of establishing a customer base – somewhere around 100% or more per year is not uncommon to see in startups.

Established SaaS businesses with a significant market have slower but steadier growth rates of around 30% to 50% per year.

Remember that these benchmarks are general guidelines and can vary greatly for your specific business.

How to Increase Annual Recurring Revenue (ARR)

Increasing the annual recurring revenue in your business boils down to three main things – customer acquisition, retention, and expansion.
To help you approach them properly, we compiled some of the best tips and strategies we got from industry experts over the years:

  • Don’t get too caught up on a single metric: Many times, a business will prioritize a single metric for a certain period and focus all of its efforts and strategies on improving it. And while they succeed at it, they overlook the other components which also play a huge role in getting down-funnel results. Don’t focus on only one metric if it means neglecting other key KPIs.
  • Produce a high volume of high-quality content: While you might be investing some resources in your blog and content marketing, ask yourself realistically – is this high-quality content that will impress the readers? If not (and the KPIs prove it), it’s time to figure out a new strategy. And if you do produce high-quality content, make sure you double down on it by increasing volume and output.
  • Run perk-based promotions: An interesting strategy to try with your promotions could be to pivot away from the ready-to-buy customers. Instead of discounting your services as a part of the promotion, focus on running perk-based promotions such as one-time advertising credit upon registration. This way, you can generate more interest without attracting only prospects that are solely interested in discounted services.

More resources to help you improve:

Visualizations

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How to track ARR (excl. Canceled Subscriptions) in Databox?

Databox is a business analytics software that allows you to track and visualize your most important metrics from any data source in one centralized platform.

To track ARR (excl. Canceled Subscriptions) using Databox, follow these steps:

  1. 1
    Connect Stripe that contains the metric you want to track
  2. 2
    Select the metric you want to track from the list of available metrics
  3. 3
    Drag and drop the selected metric onto your dashboard
  4. 4
    Watch your dashboard populate in seconds
  5. 5
    Put ARR (excl. Canceled Subscriptions) on the Performance screen
  6. 6
    Get ARR (excl. Canceled Subscriptions) performance daily with Scorecards or as a weekly digest
  7. 7
    Set Goals to track and improve performance of ARR (excl. Canceled Subscriptions)
Stripe integration with Databox Track ARR (excl. Canceled Subscriptions) from Stripe in Databox GET STARTED

Basics

  • Description
    ARR (excl. Canceled Subscriptions) stands for Annual Recurring Revenue excluding Canceled Subscriptions, a metric that calculates the total amount of revenue a SaaS company generates from its recurring subscription fees in a given year. It's a key metric to measure the growth and predict the future revenue of a SaaS business.
  • Category
    Payment Processing
  • Subcategory
    ARR
  • Date Added
    2015-04-28
  • Default Format
    PrefixCurrency
  • Cumulative Support
    No
  • Units
    Yes
  • Granularities
    hourly, daily, weekly, monthly, quarterly, yearly, allTime
  • Favorable Trend
    increasing
  • Historical Data
    No
  • Changing historical data
    No
  • Forecast Support
    Yes
  • Benchmark Support
    Yes
  • Media Support
    No
  • Dimension
    N/A
  • Metric Type
    current Learn more
  • API Endpoint
    https://api.stripe.com/v1/subscriptions

Questions? We've got answers.

  • What is the difference between MRR and ARR?

    The main difference between MRR and ARR lies in the time frame they represent.
    MRR refers to the average monthly revenue generated by customers, giving insight into the short-term revenue stream.
    ARR, on the other hand, represents the total revenue expected from subscriptions over a full year, providing a more long-term view.

  • How companies use ARR?

    Companies use ARR to measure company growth, investigate the success of their subscription model, and make better revenue forecasts.

  • Who Should Use the Annual Recurring Revenue Model?

    The Annual Recurring Revenue (ARR) model is particularly relevant for businesses that operate on a subscription-based or recurring revenue model, such as SaaS companies, subscription box services, and membership-based businesses.

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