cust.co / Glossary / ARR Growth Rate (YoY)

ARR Growth Rate (YoY)

Year-over-year change in annualized recurring revenue.

Also known as: YoY ARR Growth, Annualized ARR Growth

Definition

ARR growth rate measures how fast the recurring revenue base is expanding. Top-quartile public B2B SaaS posts 30%+ YoY ARR growth. Median is closer to 15-20%. Slowing growth at scale is normal - moving from $100M to $200M ARR is harder than moving from $10M to $20M. Pair with NRR to understand the drivers (NRR = 'existing book grew', new logos = 'top-of-funnel').

Formula

(Current ARR - Prior Year ARR) / Prior Year ARR

Related terms

Benchmark your ARR Growth Rate (YoY)

See how public B2B SaaS companies disclose this metric, with full historical time series.