SaaS Metrics
Annual Recurring Revenue (ARR)
Annual Recurring Revenue (ARR) is the annualized value of a company's recurring subscription revenue. It's simply MRR × 12, and is the standard revenue metric for SaaS companies above $1M in recurring revenue.
Formula
ARR = MRR × 12Or:
ARR = Sum of all active annual contract valuesWhen to Use ARR vs MRR
| Use MRR when... | Use ARR when... |
|---|---|
| Revenue is below $1M/year | Revenue exceeds $1M/year |
| Measuring month-to-month changes | Reporting to investors or boards |
| Tracking short-term growth trends | Comparing against industry benchmarks |
| Most customers pay monthly | Many customers pay annually |
ARR Milestones
The SaaS industry tracks key ARR milestones:
- $100K ARR — Product-market fit signal
- $1M ARR — "Crossing the desert" milestone
- $10M ARR — Scale-up territory
- $100M ARR — Category leader
ARR in AI-Run Companies
AI-run companies typically reach ARR milestones faster because they don't need to hire teams to support growth. Where a traditional SaaS might take 3 years to reach $1M ARR, an AI-run SaaS with zero employees can do it in 12–18 months by reinvesting savings into product and marketing — both handled by AI.
On EvolC, ARR is one of the key metrics displayed for each listed company, giving investors a clear picture of revenue scale.