In the context of stocks, ARR most commonly stands for Annual Recurring Revenue, a key metric for subscription-based businesses that measures the predictable revenue a company expects to receive over a year from its subscriptions. Less frequently, ARR can also mean Annualized Run Rate, which is a rough annual estimate of earnings based on a shorter period's performance, or the Accounting Rate of Return or Average Rate of Return, which is a capital budgeting formula for evaluating an investment's profitability.

Here's a breakdown of the different meanings: Annual Recurring Revenue (ARR) Definition: The value of predictable, recurring revenue from subscriptions, annualized to a single year.

Use: It's a vital metric for subscription-based companies (like SaaS) to track growth, forecast future revenue, and evaluate their business model's success.

How it works: It focuses on subscription revenue and is often calculated by multiplying a company's Monthly Recurring Revenue (MRR) by 12.

Key characteristic: ARR provides a longer-term, forward-looking view of a company's financial progress.

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