The annualized value of a SaaS company's recurring subscription revenue; the foundation of SaaS valuation and the metric agentic disruption pressures.
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ARR (Annual Recurring Revenue) is the annualized value of a SaaS company's recurring subscription revenue, the foundation metric for valuing software businesses. The Closelook view is that ARR durability — not just its growth rate — is what agentic AI calls into question: when software shifts from seats humans operate to work agents execute, the per-seat ARR base can shrink even as usage rises. This is why ARR multiples have compressed as the agentic threat gets priced in. See SaaSpocalypse 101.