What is Committed ARR (CARR)?
Committed ARR (CARR) is the total annualized value of all signed contracts, including those not yet live or recognizing revenue, giving a forward-looking view of recurring revenue that ARR alone does not capture.
CARR counts every signed contract at its annualized recurring value, even if the customer hasn't started onboarding or the revenue hasn't begun to recognize. This makes CARR a leading indicator of future ARR. The gap between CARR and ARR represents your backlog of signed-but-not-yet-live contracts, and the speed at which that gap closes depends on your implementation and onboarding capacity.
CARR vs ARR
ARR counts only contracts that are currently live and generating revenue. CARR counts all signed contracts regardless of go-live status. A company with $20M ARR and $23M CARR has $3M in signed deals that haven't started recognizing revenue yet. This distinction matters because it reveals pipeline health and implementation capacity. If the gap between CARR and ARR keeps growing, you're signing deals faster than you can onboard them, which creates churn risk.
When CARR Matters Most
CARR is most useful for enterprise SaaS companies with long implementation cycles (60-180 days from signature to go-live). In PLG or SMB SaaS where customers activate immediately, CARR and ARR are nearly identical and the distinction doesn't add value. CARR also matters during fundraising because it shows investors the revenue trajectory. A company at $15M ARR but $19M CARR can credibly claim a higher growth rate than the current ARR suggests.
CARR and Sales Compensation
Most companies pay sales commissions on booking (contract signature), which aligns with CARR, not ARR. This creates an important dynamic: the sales team is incentivized to sign contracts, but the company only realizes the revenue when those contracts go live. CROs need to monitor the conversion rate from CARR to ARR. If signed deals are churning before they ever go live (implementation abandonment), the sales team may be over-promising or targeting poor-fit customers.
Common Mistakes
Using CARR in place of ARR when reporting to the board without clearly labeling it. Boards expect ARR to mean currently recognizing revenue. Presenting CARR as ARR overstates current revenue and will create trust issues when the board discovers the gap. Always present both numbers side by side. Another mistake: not tracking the aging of the CARR-to-ARR gap. Contracts signed 90+ days ago that still haven't gone live are at risk. Build an implementation pipeline review to catch these before they become churn.
In Practice
Track CARR alongside ARR in your monthly revenue dashboard. Show the CARR-to-ARR conversion funnel: contracts signed this month, contracts in implementation, contracts gone live, and contracts that churned before go-live. Calculate the average time from signature to go-live and set a target to reduce it by 20% year-over-year. Faster implementation means faster revenue recognition, less churn risk in the backlog, and better customer experience. CROs should partner with the implementation/CS team to remove bottlenecks in this pipeline.
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