I am a bit perplexed at claiming an ARR (Annual Recurring Revenue) with not even a year of profits. Is it customary to use extrapolations/projections to measur

I am a bit perplexed at claiming an ARR (Annual Recurring Revenue) with not even a year of profits. Is it customary to use extrapolations/projections to measure ARR in the startup/business world? Even projections based on less than a year of data?