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What is ARR? Annual recurring revenue, with real US companies

ARR is a company's own yearly figure for its repeating contracts: how companies work it out, where it sits in a 10-K or 10-Q, and real US examples.

By · Checked against filings: , 1 min read, Seen in 6 companies on Cityfort. Editorial policy. Corrections

For learning only. Cityfort is not a registered investment adviser or broker-dealer and does not recommend buying or selling any security. Prices shown are dated and may be out of date.

What is annual recurring revenue (ARR)?

ARR is a company's yearly figure for its repeating sales, such as subscriptions and support contracts. Each company defines it and works it out its own way.[S1] It is not a GAAP figure (GAAP is the US accounting rules), so it is not a line in the financial statements.[S3]

How is ARR worked out?

There is no single formula. Three companies on Cityfort use three methods:

  • IBM multiplies the quarter's Software recurring revenue by four.[S3] Its Software ARR was $24.9B (Sep 30, 2026).
  • Nebius multiplies its AI cloud revenue from the quarter's last month by 12.[S5]
  • Adobe uses the annual value of its subscription contracts. It holds exchange rates fixed through the year and resets them each year.[S4]

Where do you find ARR in a 10-K or 10-Q?

Look in Management's Discussion and Analysis (MD&A). That is Item 7 of a 10-K and Part I, Item 2 of a 10-Q.[S6][S7] Adobe and IBM both define their ARR there.[S4][S3]

Cisco defines its ARR in a footnote on its results slides.[S8]

SEC guidance expects a metric like this to come with a clear definition and its calculation. It also expects why it is useful and how management uses it.[S1]

What does ARR leave out?

  • When revenue is recognized. IBM says ARR "may not represent revenue that will be recognized in future periods."[S3]
  • One-off sales. Adobe's ARR counts subscription contracts only.[S4]
  • A common method. Methods differ between companies and can change. IBM widened its definition in the first quarter of 2025.[S2]

How does Cityfort show ARR?

Each row below is the company's own figure, so the rows are not like for like. Its note names the measure and the nearest GAAP figure on the stock page, such as remaining performance obligations or a segment's revenue. See non-GAAP measures.

See it in real companies

Annual recurring revenue (ARR), as the company measures it at companies on Cityfort

6 companies on Cityfort, listed A–Z (not ranked).

Adobe
$27.5BAug 28, 2026 · Total Adobe ARR, the company's own measure; nearest GAAP figure: Remaining performance obligations, Aug 28, 2026, $22.2B · source S6
Cisco
$32.1BJul 25, 2026 · Annualized recurring revenue (ARR), the company's own measure; nearest GAAP figure: Remaining performance obligations, Jul 25, 2026, $46.7B · source S1
CrowdStrike
$5.8BJul 31, 2026 · Ending ARR, the company's own measure; nearest GAAP figure: Remaining performance obligations, Jul 31, 2026, $10.7B · source S5
IBM
$24.9BSep 30, 2026 · Software annual recurring revenue, the company's own measure; nearest GAAP figure: Software revenue, Q3 FY2026, $7.8B · source S7, S12
Nebius
3 US$ billionJun 2026 · Annualized run-rate revenue (ARR), the company's own measure; nearest GAAP figure: AI cloud revenue, Q2 FY2026, $575M · source S8
Salesforce
$3.9BJul 31, 2026 · Agentforce and Data 360 ARR (about, as Salesforce states it), the company's own measure; nearest GAAP figure: Data 360, Headless Platform, and Other subscription revenue, Q2 FY2027, $3.6B · source S6, S32

From each company's filings, as cited on its Cityfort stock page. These figures change when a stock page is updated.

Questions people ask

Is ARR the same as revenue?
No. Revenue is the GAAP figure for sales recognized in a period. ARR is the company's own yearly figure for its repeating contracts. IBM says its ARR should be viewed separately from its software revenue.[S3]
Is ARR a GAAP measure?
No. It is a performance metric each company defines for itself. SEC guidance expects such a metric to come with a clear definition, how it is calculated, why it is useful to investors and how management uses it.[S1]
How is ARR different from remaining performance obligations?
Remaining performance obligations are a GAAP disclosure in the notes: contracted revenue not yet recognized. Cisco says its ARR is a management metric to be viewed separately from revenue, deferred revenue and remaining performance obligations.[S4][S8]
Why can a company's ARR change when its customers have not?
The method or its inputs can change. Adobe revalues its ARR at new exchange rates each year, and IBM widened its definition in 2025. SEC guidance asks companies to consider disclosing a material change in method, why it was made and its effect.[S4][S2][S1]

Sources

  1. S1Commission Guidance on Management's Discussion and Analysis of Financial Condition and Results of Operations (key performance indicators and metrics), Release Nos. 33-10751 and 34-88094, Jan 30, 2020 · U.S. Securities and Exchange CommissionTier 1: company or exchange filing · Jan 30, 2020
  2. S2International Business Machines Corporation: Form 10-Q for the quarter ended Mar 31, 2025, Part I, Item 2 (Management's Discussion and Analysis), Software segment · International Business Machines Corporation (SEC EDGAR)Tier 1: company or exchange filing · Apr 24, 2025
  3. S3International Business Machines Corporation: Form 10-Q for the quarter ended Sep 30, 2026, Part I, Item 2 (Management's Discussion and Analysis), Software segment · International Business Machines Corporation (SEC EDGAR)Tier 1: company or exchange filing · Oct 22, 2026
  4. S4Adobe Inc.: Form 10-Q for the quarter ended Aug 28, 2026, Part I, Item 2 (Management's Discussion and Analysis, overview) and Note on revenue (remaining performance obligations) · Adobe Inc. (SEC EDGAR)Tier 1: company or exchange filing · Sep 22, 2026
  5. S5Nebius Group N.V.: Letter to shareholders, Q2 2026 (Form 6-K, Exhibit 99.2), footnote defining annualized run-rate (ARR) · Nebius Group N.V. (SEC EDGAR)Tier 1: company or exchange filing · Aug 12, 2026
  6. S6Investor Bulletin: How to Read a 10-K, September 2011 · U.S. Securities and Exchange Commission, Office of Investor Education and AdvocacyTier 1: company or exchange filing · Sep 1, 2011
  7. S7Form 10-Q, Part I, Item 2 (Management's Discussion and Analysis of Financial Condition and Results of Operations) (form version SEC 1296, 02-25) · U.S. Securities and Exchange CommissionTier 1: company or exchange filing · Feb 1, 2025
  8. S8Cisco Systems, Inc.: Q4 FY2026 earnings slides, "Q4 FY 2026 RPO and ARR" slide and its footnote · Cisco Systems, Inc. (investor relations)Tier 1: company or exchange filing · Aug 12, 2026

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