ARR (Annual Recurring Revenue) is MRR × 12. ARR is the headline metric in SaaS pitch decks and investor reports because year-over-year comparisons matter most for a business operating on annual contracts and budgets. MRR is what operators track week-over-week and month-over-month for momentum.
Both ARR and MRR exclude one-time fees (setup, implementation, professional services), include upgrades and downgrades from existing customers, and reflect the current-state run rate rather than trailing 12-month revenue. The "$1M ARR" milestone is the canonical proof-point for product-market fit signal in SaaS.