As the Corporate Finance Institute explains, ARR is a valuable metric for subscription-driven companies because it helps them quantify growth, evaluate the success of the subscription model and forecast future revenue.
In fact, the subscription economy is expected to reach $1.5 trillion in 2025, underscoring the importance of effective revenue tracking for sustained growth.
Annual recurring revenue is a key metric in the subscription economy that measures the recurring revenue that the business gets from its subscriptions during a single calendar year.
Adding up the yearly subscription value of each customer provides the total ARR, allowing organizations to gauge the overall health of their business.
#subscription-economy #annual-recurring-revenue #business-strategy #revenue-tracking #growth-opportunities
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