Annual Recurring Revenue (ARR) from Retainers

It is your retainer income expressed as an annual number — the subscription layer of your agency.

Formal definition

ARR from recurring revenue equals monthly recurring retainer revenue multiplied by twelve.

Why it matters

ARR from retainers is the stability layer; project revenue stacks on top but should not be the only floor.

Where you see it

• Agency board decks
• SaaS-style agency playbooks
• Cash-flow forecasting models
• Private equity agency roll-ups
• Retainer contract renewals

Worked example

1. Monthly retainer revenue:
2. ARR recurring =
3. Interpretation: Retainers imply $216k annualized recurring pace.

How Business metrics calculates it

MRR × 12.

Where people fool themselves

ARR that annualizes a month with a 12-month prepay counted in full will double-count. MRR should be the run-rate, not the cash spike.

Run it on your own numbers: the Freelance & Agency calculator.