ARR

Abbreviation with 3 meanings

ARR
Stands forAnnual recurring revenue
Meanings3
CategoriesBusiness & Finance, Medical

ARR has three meanings. The most common are Annual recurring revenue (finance) and Absolute risk reduction (medical research); it can also stand for Accounting rate of return.

Meanings of ARR at a glance

#ARR stands forContext
1Annual recurring revenueBusiness & Finance › Finance
2Absolute risk reductionMedical › Medical Research
3Accounting rate of returnBusiness & Finance › Finance

1. Annual recurring revenue

Business & Finance · Finance Abbreviations

Annualized value of a company's contracted subscription revenue at a point in time, typically monthly recurring revenue times twelve. It is the headline growth metric for software-as-a-service (SaaS) businesses and their investors.

Example: The startup crossed $50 million in ARR, up 70 percent year over year, with net revenue retention of 125 percent.

ARR is a non-GAAP metric, and companies define it differently, for example in whether usage-based fees or one-off services are included. Venture investors use ARR milestones, such as $1 million or $100 million, as benchmarks of startup progress. In capital budgeting, ARR instead means accounting rate of return.

2. Absolute risk reduction

Medical · Medical Research Abbreviations

Difference in outcome rates between control and treatment groups, such as 10 percent minus 8 percent giving a 2 percentage point reduction. It shows how much a treatment changes risk in absolute terms and is the basis for calculating the number needed to treat.

Example: ARR 2% (from 10% to 8%), so the NNT is 50.

Also called the risk difference. A treatment with a 20 percent relative risk reduction yields a large ARR in high-risk patients but a tiny one in low-risk patients. Risk communication guidance recommends presenting absolute figures alongside relative ones.

3. Accounting rate of return

Business & Finance · Finance Abbreviations

Capital-budgeting measure equal to the average annual accounting profit from an investment divided by the initial or average investment. It is simple to calculate from projected financial statements but ignores the timing of cash flows.

Example: The new machine shows an ARR of 18 percent, above the 15 percent the board requires.

Also called the average rate of return. Unlike NPV and IRR, it uses profit after depreciation rather than cash flow and does not discount future amounts. It remains a staple of management accounting syllabuses such as those of ACCA and CIMA, even though few large companies rely on it.

More finance abbreviations

  • ABL – Asset-based lending
  • APA – Asset purchase agreement
  • APV – Adjusted present value
  • ATM – At-the-market offering
  • AUM – Assets under management
  • CAGR – Compound annual growth rate
  • CapEx – Capital expenditure
  • CAPM – Capital asset pricing model

See all 88 finance abbreviations →

More medical research abbreviations

  • 510(k) – Premarket notification (FDA section 510(k))
  • AHRQ – Agency for Healthcare Research and Quality
  • AUC – Area under the receiver operating characteristic curve
  • BTD – Breakthrough therapy designation
  • CBER – Center for Biologics Evaluation and Research
  • CDER – Center for Drug Evaluation and Research
  • CEA – Cost-effectiveness analysis
  • CI – Confidence interval

See all 94 medical research abbreviations →

This entry is for general education and is not medical advice. Abbreviation use varies between institutions; always confirm in context.