ARR stands for Annual Recurring Revenue — the yearly value of the recurring revenue a subscription business expects to keep. It is simply MRR multiplied by twelve, annualized for easier comparison. Executives, investors, and SaaS leaders talk about ARR because it is a cleaner headline number than monthly figures when you are comparing companies or setting quotas.
In plain English
ARR is MRR written bigger. A product with $100,000 in MRR has $1.2 million in ARR. It is the same money, just shown on a yearly clock, and it is the number you will see on dashboards, earnings calls, job posts, and in the news.
Why it matters to you
When a company says "we're a $50M ARR business," that tells you its size and maturity, which shapes how realistic your quota and ramp are. Understanding ARR — and how it moves with expansion and churn — lets you ask sharp questions in interviews and read the health of the business you are joining. If your comp is ARR-based, know exactly how attainment is credited against your quota.