{"id":7434,"date":"2026-04-07T18:20:49","date_gmt":"2026-04-07T18:20:49","guid":{"rendered":"https:\/\/globalnewstoday.uk\/index.php\/2026\/04\/07\/ai-firms-annual-recurring-revenue-metrics-draw-scrutiny-pymnts-com\/"},"modified":"2026-04-07T18:20:49","modified_gmt":"2026-04-07T18:20:49","slug":"ai-firms-annual-recurring-revenue-metrics-draw-scrutiny-pymnts-com","status":"publish","type":"post","link":"https:\/\/globalnewstoday.uk\/index.php\/2026\/04\/07\/ai-firms-annual-recurring-revenue-metrics-draw-scrutiny-pymnts-com\/","title":{"rendered":"AI Firms\u2019 Annual Recurring Revenue Metrics Draw Scrutiny &#8211; PYMNTS.com"},"content":{"rendered":"<p>Many artificial intelligence (AI) startups use annual recurring revenue as a metric for their growth.<\/p>\n<p>Complete the form to unlock this article and enjoy unlimited free access to all PYMNTS content \u2014 no additional logins required. \t<br \/><span class=\"wpcf7-form-control-wrap\" data-name=\"firstName\"><input size=\"40\" 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aria-invalid=\"false\" placeholder=\"Country*\" value=\"\" type=\"text\" name=\"YourCountry\" \/><\/span> \t\t\t\t<br \/><span class=\"wpcf7-form-control-wrap\" data-name=\"newsLetterChoice\"><span class=\"wpcf7-form-control wpcf7-checkbox me-1\" id=\"checkNewsletter\"><span class=\"wpcf7-list-item first last\"><input type=\"checkbox\" name=\"newsLetterChoice[]\" value=\"yes\" checked=\"checked\" \/><span class=\"wpcf7-list-item-label\">yes<\/span><\/span><\/span><\/span><span class=\"small\">Subscribe to our daily newsletter, PYMNTS Today.<\/span> \t\t\t\t<br \/>By completing this form, you agree to receive marketing communications from PYMNTS and to the sharing of your information with our sponsor, if applicable, in accordance with our <a class=\"fw-bold\" href=\"https:\/\/pymnts-com-develop.go-vip.net\/privacy-policy\/\">Privacy Policy<\/a> and <a class=\"fw-bold\" href=\"https:\/\/pymnts-com-develop.go-vip.net\/terms-conditions\/\">Terms and Conditions<\/a>. \t\t\t\t<br \/><input id='hiddenPath' type='hidden' name='path' value='' \/><input type='hidden' name='userDeviceId' id='userDeviceId' \/><input type='hidden' name='pageTitle' id='pageTitle' \/> \t\t\t\t<br \/><input class=\"wpcf7-form-control wpcf7-submit has-spinner btn btn-dark text-uppercase py-2 px-5 small\" id=\"theSubmitButton\" type=\"submit\" value=\"Submit\" \/> \t\t\t\t\t<br \/><label>&#916;<textarea name=\"_wpcf7_ak_hp_textarea\" cols=\"45\" rows=\"8\" maxlength=\"100\"><\/textarea><\/label><input type=\"hidden\" id=\"ak_js_1\" name=\"_wpcf7_ak_js\" value=\"234\"\/><script>document.getElementById( \"ak_js_1\" ).setAttribute( \"value\", ( new Date() ).getTime() );<\/script><br \/>However, this increasingly common practice has become one of the least-trusted measurements of success in the AI space, Bloomberg News <a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2026-04-07\/what-is-arr-behind-the-least-trusted-metric-of-the-ai-era?utm_source=website&amp;utm_medium=share&amp;utm_campaign=email\">reported<\/a> Tuesday (April 7).<br \/>\u201cThe startup world has always been a bit more of a Wild West,\u201d <a href=\"https:\/\/profiles.stanford.edu\/charles-eesley\">Chuck Eesley<\/a>, professor of management science and engineering at <a href=\"https:\/\/www.stanford.edu\/\">Stanford University<\/a>, told Bloomberg.<br \/>\u201cThere are no audit requirements, there are no SEC definitions, so basically there\u2019s no cop on the beat other than the VCs and acquirers doing their due diligence,\u201d he said, so that a number can \u201cmean whatever the founder needs it to mean\u201d during dealmaking or fundraising.<br \/>Annual recurring revenue (ARR) calculations work like this: a company takes a single month\u2019s revenue from recurring contracts and multiples it by 12 for a year-long projection. Companies that have <a href=\"https:\/\/www.pymnts.com\/artificial-intelligence-2\/2026\/openais-annual-recurring-revenue-tripled-to-20-billion-in-2025\/\">used this practice<\/a> include <a href=\"https:\/\/www.anthropic.com\/\">Anthropic<\/a> and <a href=\"https:\/\/openai.com\/\">OpenAI<\/a>.<br \/>We&#8217;d love to be your <a href=\"https:\/\/www.google.com\/preferences\/source?q=pymnts.com\" target=\"_blank\" rel=\"noopener\">preferred source for news<\/a>.<br \/>Please add us to your preferred sources list so our news, data and interviews show up in your feed. Thanks!<br \/>The Bloomberg report noted that there is nothing inherently wrong with measuring growth this way, and if a company adds new subscribers each month, it can offer a more accurate glimpse into revenue than looking at past sales.<br \/>Advertisement: Scroll to Continue<br \/><a href=\"https:\/\/www.linkedin.com\/in\/darren-yee-458791b8\">Darren Yee<\/a>, a senior venture associate at <a href=\"https:\/\/entrepreneur.nyu.edu\/resource\/innovation-venture-fund\/\">NYU\u2019s Innovation Venture Fund<\/a>, told Bloomberg that\u2014until recently\u2014ARR was seen as a reliable gauge for software businesses, especially those selling predictable services to other companies.<br \/>\u201cThis worked really well when <a href=\"https:\/\/www.pymnts.com\/subscriptions\/2025\/why-the-subscription-business-is-no-longer-about-content\/\">subscription pricing<\/a> was very straightforward,\u201d Yee said. \u201cAnd that\u2019s been true for a long time, basically up until AI.\u201d<br \/>However, recurring revenue gives companies a lot of freedom in how precisely to measure, meaning it\u2019s easy for startups to juke their numbers, which can vary if revenue swings from week to week or recurring subscriptions lapse.<br \/>Eesley said many AI business customers are eager to try <a href=\"https:\/\/www.pymnts.com\/news\/artificial-intelligence\/2026\/ai-moves-saas-subscriptions-consumption\/\">new tools<\/a>, but only on a trial basis before cancelling their subscriptions. Revenue from that trial period can be considered as \u201crecurring,\u201d even if a contract doesn\u2019t renew.<br \/>In other AI news, OpenAI issued a report this week calling for an <a href=\"https:\/\/www.pymnts.com\/artificial-intelligence-2\/2026\/openai-urges-new-economic-rules-for-the-ai-era\/\">industrial policy<\/a> that can manage the challenges presented by the technology.<br \/>\u201cAs AI <a href=\"https:\/\/www.pymnts.com\/artificial-intelligence-2\/2025\/employers-encourage-ai-at-work-with-or-without-guardrails\/\">reshapes work<\/a>, knowledge, and production, incremental updates won\u2019t be enough,\u201d the company said in a LinkedIn post announcing the report. \u201cThe scale of change demands new ideas and institutions to ensure this transition benefits everyone.\u201d<br \/>                   AI Firms\u2019 Annual Recurring Revenue Metrics Draw Scrutiny                <br \/>                   Third-Party Agents Lose Access as Anthropic Tightens Claude Usage Rules                <br \/>                   Digital Health Funding Sees $1 Billion Boost Since Q1 2025                <br \/>                   Solana Rolls Out Tools to Fend Off Blockchain Security Threats                <br \/>Get PYMNTS Today, AI, B2B and more.<br \/>We\u2019re always on the lookout for opportunities to partner with innovators and disruptors.<\/p>\n<p><a href=\"https:\/\/news.google.com\/rss\/articles\/CBMirwFBVV95cUxPUVZWZXNERzZlUjc0bmJtSGRVdFltQ2Z4VEpDejJjNDFuTkl6bTFxQjRadkVCaWVaTERPbmI1SlRuekljRjF3UkxvX3VOUEtIbFpqd0lNYng2ZjhFaWNJcDh4ZGJLVWJxUzllUS1hcEwxcHdZcXNWYUdObHlKVDBXZ2x3TFlFd2NxQ2NVLWg3ZUhxdHY2bnkyYlpmbWotUkU3Wllwa0FzdVJxWTZMa2xN?oc=5\">source<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Many artificial intelligence (AI) startups use annual recurring revenue as a metric for their growth. 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