Glossary · Letter A

Annual Recurring Revenue (ARR)

The yearly value of all active subscription contracts a SaaS or service business holds. ARR is the standard health metric for recurring-revenue businesses. AI follow-up agents and retention workflows directly move ARR by reducing churn, increasing renewals, and expanding contracts. The 1% rule: a 1% churn improvement on a $1M ARR base is worth $10K/year in recovered revenue.

Related terms

Churn RateNet Revenue RetentionPipeline
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