Revenue & Retainers
Annual Recurring Revenue (ARR)
Agency glossary · Updated July 2026
Definition
Annual recurring revenue (ARR) is the value of an agency’s recurring retainer and contract revenue expressed over a full year. It is simply MRR multiplied by twelve, and it is a useful way to size the predictable portion of the business.
Formula
MRR x 12Why it matters
ARR frames the recurring base as an annual number, which is easier to compare against costs and goals and is the language investors and buyers use.
Because ARR is a point-in-time run rate, it can overstate a full year for a fast-growing or churning agency. Pair it with actual trailing revenue.
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