Committed annual recurring revenue (CARR)

CARR includes revenue that is contractually committed but not yet flowing. The gap between ARR and CARR is made up of deals that are signed but sitting in implementation, in a future-dated start, or in the first step of a ramp.

For businesses with long onboarding cycles — anything requiring data migration, integration work or a phased rollout — CARR is often the more representative number. A company with $8M ARR and $11M CARR has three million dollars of signed revenue waiting on delivery, which is a materially different position from a company where the two figures match.

Where it gets abused

CARR is easier to inflate than ARR, and inflation happens in predictable places:

• Counting the full value of a ramp deal at its year-three rate rather than its current-year rate.
• Including deals with termination-for-convenience clauses as committed, when the customer can exit on 30 days’ notice.
• Including pilots and paid proofs of concept that were never going to auto-renew.
• Never removing deals that stall in implementation and quietly die.

A disciplined CARR definition specifies which contract states count, and reconciles to ARR as those contracts go live. If nobody can produce that reconciliation, the number is marketing rather than reporting.