Formula
Gross New ARR + Expansion ARR - Contraction ARR - Churned ARR
How to measure
Sum all ARR gained from new customers and expansion, then subtract ARR lost to contraction and full churn within the same period.
Why track it
Net new ARR is the headline growth number most investors track quarter over quarter to judge overall business momentum.
Example
A company adds $900,000 gross new and $300,000 expansion ARR, while losing $200,000 to churn, for $1,000,000 net new ARR.