ARR

Annual Recurring Revenue (ARR) is the value of recurring subscription revenue normalized to a one-year period. For SaaS companies, ARR is the primary health metric. Jason Lemkin's SaaStr research shows that $1M→$10M ARR takes ~2 years for top companies, while $10M→$100M takes ~4 years. For PMs, ARR growth comes from new bookings, expansion revenue, and reducing churn. The 'Rule of 40' (growth rate + profit margin >40%) is the benchmark for healthy SaaS.