# What is ARR?

> ARR, annual recurring revenue, is the yearly value of your subscriptions, usually MRR times twelve. When founders use ARR and when MRR is clearer.

**ARR (annual recurring revenue)**: ARR is the yearly value of a business's recurring subscriptions, usually calculated as MRR multiplied by twelve.

ARR, or annual recurring revenue, is the yearly value of your active subscriptions. For most small businesses it is simply MRR times twelve.

## The short definition

**ARR** answers: if nothing changed, how much recurring revenue would we earn over a year? The usual calculation is [MRR](https://makerhandle.com/glossary/mrr) × 12. A product with $2,000 MRR has $24,000 ARR.

Like MRR, it excludes one-off payments, services and setup fees. It is a run rate, not a forecast.

## When to use ARR or MRR

**ARR** is common for businesses that sell mostly yearly contracts, and in fundraising, where bigger numbers and annual planning are the norm.

**MRR** is clearer for most indie products with monthly plans, because it moves visibly month to month. A $300 change in MRR is easy to feel. The same change in ARR, $3,600, can sound inflated to an indie audience.

Whichever you use, say which, and do not mix them in one update.

## Common mistakes

- **Annualizing a good month of one-off sales.** That is a revenue run rate, not ARR.
- **Counting signed but unstarted contracts.** Some companies call that contracted ARR; label it if you use it.
- **Ignoring churn.** ARR is a snapshot. If customers are leaving fast, next year's revenue will be lower.

## On makerhandle

makerhandle shows **MRR**, verified from Stripe, or the last 30 days of sales for products without subscriptions. That keeps every page and the [leaderboard](https://makerhandle.com/features/leaderboard) comparable. If you want to mention ARR, put it in your bio. See [verified revenue](https://makerhandle.com/features/verified-revenue).

## Questions

### How do you calculate ARR?

Usually MRR multiplied by twelve, counting only recurring subscription revenue.

### Is ARR the same as annual revenue?

No. Annual revenue includes everything you earned in a year. ARR is the yearly value of current recurring subscriptions.

### Should an indie product report ARR or MRR?

MRR is usually clearer for monthly plans. Use ARR if most customers pay yearly.

### Does makerhandle show ARR?

No. It shows MRR or the last 30 days of sales, so every page is comparable.

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Source: https://makerhandle.com/glossary/arr
makerhandle: makerhandle is a link in bio for makers and founders: every project with its status and revenue verified from Stripe, Paddle and more.