- Annual Recurring Revenue (ARR)
- Growth Rate

The formula is:

Your growth rate is the rate at which your company increases the ARR on an annual basis. Example:

If your ARR was $100.000 at the end of 2014 and $150.000 at the end of 2015 your growth rate will be 50%.

The formula is:

ARR[-1] : ARR one year ago

ARR[now] : ARR now

Growth Rate = (ARR[now] - ARR[-1])/ARR[-1]

In our example that is:

Growth Rate = ($150.000 - $100.000)/$100.000 = 0.5 = 50%

If your ARR was $100.000 at the end of 2014 and $150.000 at the end of 2015 your growth rate will be 50%.

The formula is:

ARR[-1] : ARR one year ago

ARR[now] : ARR now

Growth Rate = (ARR[now] - ARR[-1])/ARR[-1]

In our example that is:

Growth Rate = ($150.000 - $100.000)/$100.000 = 0.5 = 50%

In a typical SaaS a large part of the income is recurring revenue. In your company you might call it Hosting or License. To find your ARR you must take the look at what your clients pay on an annual basis for your recurring services.

Typically you will not include startup fees and project payments into this number.

Typically you will not include startup fees and project payments into this number.