Committed ARR (CARR)
In short
Committed ARR (CARR) is the annual recurring revenue from all signed contracts, including those that have been signed but have not yet started billing. It equals live ARR plus contracted future ARR, adjusted for known cancellations.
CARR is useful when implementation or contract start dates lag the signature. It shows what the business has already won, rather than only what has gone live.
How CARR is calculated
- Formula: CARR = current ARR + signed but not yet live ARR - ARR with notice of cancellation.
- Example: Say a company has $5.0 million of live ARR, $600,000 of signed contracts awaiting go-live, and $200,000 of customers who have given notice. CARR is $5.4 million.
CARR vs. ARR
ARR counts revenue that is live. CARR adds signed commitments that will start soon. The gap between them is a rough measure of the implementation backlog.
When it helps
Long onboarding, enterprise rollouts, and contracts with future start dates make ARR lag sales. CARR reflects the work sales has already done.
When it can mislead
If signed deals stall before go-live, CARR overstates real revenue. Always label which metric you present.
How GTM teams use CARR
- Sales performance: Reps and leaders see bookings reflected in the number sooner.
- Capacity planning: A large gap between CARR and ARR signals that onboarding needs more people.
- Forecasting: It gives finance a view of revenue that is contracted but not yet recognized.
Common mistakes
- Including unsigned deals or verbal commitments. Only signed contracts count.
- Forgetting to subtract customers who gave notice.
- Switching between ARR and CARR across reports without saying so.
- Treating usage-based or cancellable terms as committed when the contract does not guarantee them.
Committed ARR FAQs
What is committed ARR (CARR)?
Committed ARR is annual recurring revenue that includes signed contracts not yet billing, minus customers who have given notice to cancel. It shows contracted recurring revenue rather than only the revenue that is already live.
What is the difference between ARR and committed ARR?
ARR counts recurring revenue from live, active customers. Committed ARR adds recurring revenue from contracts that are signed but have not started yet. The difference reflects deals waiting on implementation or a future start date.
How do you calculate committed ARR?
Start with current ARR, add the annual value of signed contracts that have not gone live, and subtract the annual value of customers who have given notice of cancellation. Only signed contracts should be included in the figure.
Why do companies report committed ARR?
Companies with long onboarding or future contract start dates use it because ARR alone understates the business they have already won. It gives a more current picture, but it must be labelled clearly so it is not mistaken for live ARR.
