CARR closes the gap between bookings and recognized ARR
Committed ARR (CARR) adds signed-but-not-yet-live deals to current ARR, giving a forward view of contracted revenue that ARR alone cannot provide. For companies with onboarding cycles, implementation periods, or future-dated contract starts, ARR can significantly understate what has already been sold. CARR = Current ARR + ARR from Signed Contracts Not Yet LiveA customer who signs in Q3 with a go-live in Q4 contributes zero to ARR until activation. It contributes to CARR from the moment the contract is executed.
When CARR diverges from ARR
The gap between CARR and ARR is largest when:
- Implementation cycles are long. Enterprise SaaS with multi-month onboarding will regularly show a CARR that exceeds ARR by a material amount. - Contract start dates are future-dated. Some deals are signed at one point in the fiscal year but structured to begin in a new budget cycle. - Sales velocity is accelerating. A strong sales quarter produces a CARR bulge before ARR catches up.
| Metric | What It Includes | Timing |
|---|---|---|
| ARR | Live, recognized recurring revenue | Current snapshot |
| CARR | ARR + signed not-yet-live contracts | Forward contracted position |
| Bookings | All new contract value signed in period | Period flow metric |
How investors and CFOs use CARR
Investors use CARR to evaluate growth momentum without waiting for onboarding delays to resolve. A company that closes a record sales quarter but reports flat ARR looks stagnant on ARR alone. CARR surfaces the true trajectory.
CFOs use CARR for cash flow planning. Knowing that a signed contract will begin generating revenue in 60 days is a planning input, even if it does not appear in today's ARR.
The reliability of CARR depends entirely on how rigorously signed contracts are tracked and how consistently go-live timelines are forecast. A CARR number inflated by contracts at risk of renegotiation or delayed onboarding is not a useful planning input.
CARR in the revenue reporting stack
CARR sits between bookings momentum and recognized ARR in the revenue intelligence stack. For the components that feed into it, see annual recurring revenue for the base metric, booked ARR vs. billed ARR for the recognition timing distinction, and net new ARR for the period-over-period growth view.
Frequently Asked Questions
What is committed ARR (CARR)?
Committed ARR, or CARR, is the sum of a company's current recognized ARR plus ARR from contracts that have been signed but whose service period has not yet started. It gives a forward-looking view of contracted revenue that ARR alone, which only counts live customers, does not capture.
Why is CARR useful when you already track ARR?
ARR counts only revenue from active customers. In businesses with meaningful sales-to-go-live lag, ARR understates the true contracted position. A company that closes a large deal in November that goes live in February will show no ARR benefit until February. CARR captures that revenue immediately upon signing.
How is CARR different from bookings?
Bookings is the total contract value signed in a period, including one-time fees, professional services, and multi-year prepayments. CARR normalizes bookings into an annualized recurring view and adds it to existing ARR. CARR is a stock metric (a snapshot of total contracted ARR), while bookings is a flow metric (new value signed in a period).
Put these metrics to work
ORM builds custom revenue forecast models that turn concepts like committed arr (carr) into prescriptive action for your team.
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