[BummerCloud]

I'd be cautious multiplying your MRR x 12 to establish ARR. Things like seasonality or promotions could overestimate your ARR by using inflated subscription numbers. Additionally, if customers are not contractually obligated to stick around for a year, that calculation may not account for month-to-month churn.

[encoderer]

ARR is always MRRx12.

You're talking about a revenue model.

[jasongill]

I think the confusion here stems from the terms "annual run rate" and "annual recurring revenue" sharing the same acronym

[encoderer]

I admit it’s confusing, but those are exactly the same thing. Have the same formulas.

https://www-priceintelligently-com.cdn.ampproject.org/i/s/ww...

https://www-profitwell-com.cdn.ampproject.org/i/s/www.profit...

[thih9]

> ARR is always MRRx12.

Are you saying that ARR is meaningless for heavily seasonal businesses?

[santiagobasulto]

not meaningless, but it is well understood that ARR=MRRx12, so if there's a heavily seasonal business with a big percentage of monthly users, ARR is known to be skewed. In those cases I'd look for YoY growth with prev year.

[ezekg]

I’m pretty comfortable with MRRx12 for annual run rate, which is pretty normal from what I’ve seen. But I do have other unmentioned revenue forecasting metrics based on current/past growth/churn rate, which I pay more attention to than my ARR. I don’t base a lot on this number either way.