Committed ARR (CARR)
The total ARR from signed contracts, including deals that have been signed but not yet activated or deployed. CARR accounts for the future revenue pipeline that has not started generating MRR yet.
CARR Bridges the Gap Between Signed and Live
Enterprise SaaS companies often sign deals months before the customer goes live. During that gap, the deal does not show up in ARR because no recurring revenue is being generated yet. CARR captures this committed but not-yet-active revenue, giving you a more complete picture of your business trajectory.
When CARR Matters
If your implementation cycles are 30 days or less, CARR and ARR are nearly identical. But if enterprise implementations take 3-6 months, CARR can be significantly higher than ARR at any given moment. Boards and investors want to see both — ARR shows current performance, CARR shows momentum.
The Risk in CARR
Not all committed ARR converts to active ARR. Implementations fail. Customers get cold feet. Contracts have activation-dependent terms. Track your CARR-to-ARR conversion rate. If you consistently sign $500K in CARR per quarter but only $400K activates, you have a 20% implementation leakage problem.
Frequently Asked Questions
How is CARR different from ARR?
ARR counts only active, revenue-generating subscriptions. CARR includes ARR plus signed contracts not yet live. If your ARR is $5M and you have $500K in signed contracts deploying next quarter, your CARR is $5.5M. CARR is a forward-looking metric; ARR is a current-state metric.
When should you use CARR instead of ARR?
Use CARR when you have enterprise deals with long implementation cycles (3-6 months between signing and go-live). If most of your contracts activate within days of signing, the gap between ARR and CARR is negligible and ARR suffices.
