ARR is a snapshot, not a reported period figure, which is why it is a non-gaap measure that never appears in the audited statements. It leads reported revenue during growth and lags it during decline.
Its usefulness depends entirely on discipline about what counts as recurring. Companies that fold in professional services or one-off licences produce an ARR that behaves nothing like a subscription base.
Example: Northwind Cloud exits the year with $222M of ARR against $210M of reported revenue. The 6% gap is growth already contracted but not yet recognised.
Related: monthly-recurring-revenue, net-revenue-retention, deferred-revenue, remaining-performance-obligations, run-rate-note