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ARR as a Percentage of Total Revenue

What is ARR as a Percentage of Total Revenue?

ARR as a Percentage of Total Revenue measures the percentage of your total revenue that comes from recurring revenue as opposed to one-time or non-subscription revenue.

How to calculate ARR as a Percentage of Total Revenue

ƒ Sum(ARR) / Sum(Total Revenue)

Example

Say your ARR is $100,000 and your total revenue is $120,000. Your percentage of ARR out of total revenue is about 83%.

More about this metric

ARR as a Percentage of Total Revenue gives you the percentage of your total revenue that consists of recurring revenue. This metric is important to track especially if you primarily employ a subscription-based billing model. By tracking ARR as a Percentage of Total Revenue, you are able to detect if too much of your revenue comes from one-off transactions which indicates you may need to prioritize your paying subscribers.

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