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ARR as a Percentage of Total Revenue

Date created: Jul 7, 2021  •   Last updated: Feb 9, 2022

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.

ARR as a Percentage of Total Revenue Formula

ƒ Sum(ARR) / Sum(Total Revenue)

How to calculate ARR as a Percentage of Total Revenue

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

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How to visualize ARR as a Percentage of Total Revenue?

Line charts are the best way to visualize ARR as a percentage of total revenue. This will let you easily identify changes in trends over time. In short, any time this metric trends down below average, you may be at risk of losing stable income.

ARR as a Percentage of Total Revenue visualization example

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ARR as a Percentage of Total Revenue

Line Chart

Here's an example of how to visualize your ARR as a Percentage of Total Revenue data in a line chart over time.
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ARR as a Percentage of Total Revenue

Line Chart

Here's an example of how to visualize your ARR as a Percentage of Total Revenue data in a line chart over time.

More about ARR as a Percentage of Total Revenue

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.