The yearly value of all active subscriptions in ARR (Annual Recurring Revenue), counted as if every customer keeps paying at today's rate for the next twelve months.
Stripe quietly hit $1 billion in annualized revenue in 2018, a milestone reported by The Information after the company raised at a $20B valuation. The number anchored a generation of fintech benchmarks: investors started using 'time to $100M ARR' as the standard scoring system for infra startups.
Two ways to express the same subscription revenue, just in different time units. Pick the wrong one in a board meeting and you'll look junior.
| Aspect | ARR | MRR |
|---|---|---|
| Time horizon | Annual (12 months forward) | A single month |
| Who quotes it | Series A+ boards and investors | Seed-stage founders on a weekly cadence |
| Quick conversion | MRR × 12 | ARR ÷ 12 |
| Common misuse | Quoted when only one month is billed but the contract is annual | Quoted as a 'run rate' that ignores churn |
| Best used for | Long-horizon planning and valuation comps | Short-horizon health checks |
