Glossary > Annual Recurring Revenue (ARR)

Annual Recurring Revenue (ARR)

Annual recurring revenue (ARR) is the amount of predictable revenue that comes in every year for the lifetime of a contract. It is calculated by normalizing the recurring revenue generated by customers for a single calendar year, and is predominantly used by businesses operating on a subscription-based model.

The calculation of ARR involves dividing the annualized value of subscriptions by the average monthly subscription rate. It also accounts for any discounts or refunds provided to customers which may lower their monthly charge. This can be calculated as follows:

[(monthly recurring revenue / number of months in period) – refunds and discounts] * 12

Explore SaaS Topics

Explore XaaS Topics

Discover and learn all about SaaS, XaaS, and the Cloud.

Glossary Terms


Your go-to resource to break down the key terms you need to know about XaaS.

Ready to learn more about CloudBlue?

CloudBlue is a powerful XaaS platform that will help you grow revenue. Here are some resources for more information:

Subscription and Billing Management

Subscription and Billing Management

Our flexible subscription and billing solution can handle the most complex XaaS business models – and scale recurring revenue.

Partner and Channel Management

Partner and Channel Management

Cut through complexity and see more revenue from your channel business as you easily onboard and enable resellers across the globe – at scale.

Vendor and Product Information Management

Vendor and Product Information Management

Centralize all of your vendor and supplier contracts and streamlined product information on one platform.

Ready to
get started?

Sign up or talk with a CloudBlue
expert today to get started.

CloudBlue, an Ingram Micro Business uses Cookies to improve the usability of our site. By continuing to use this site and/or log-in you are accepting the use of these cookies. For more information, visit our Privacy Policy