The subscription revenue of a given period is calculated as an annual run rate for all contracts, including those signed in the same period. CARR differs from ARR because it includes the ARR of new customers that are not yet live. After all, the customer onboarding process is not yet complete. Enterprise SaaS companies use the metric because customer onboarding usually takes longer than one month, and this delay understates the actual Annual Recurring Revenue if only ARR is used.
The subscription revenue of a given period is calculated as an annual run rate for all contracts, including those signed in the same period. CARR differs from ARR because it includes the ARR of new customers that are not yet live. After all, the customer onboarding process is not yet complete. Enterprise SaaS companies use the metric because customer onboarding usually takes longer than one month, and this delay understates the actual Annual Recurring Revenue if only ARR is used.
