Definition
The total change in annual recurring revenue for a period, combining new, expansion, contraction, and churned ARR.
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.
FAQ
- What is Net New ARR?
- The total change in annual recurring revenue for a period, combining new, expansion, contraction, and churned ARR.
- How do you calculate Net New ARR?
- Gross New ARR + Expansion ARR - Contraction ARR - Churned ARR
- Why track Net New ARR?
- Net new ARR is the headline growth number most investors track quarter over quarter to judge overall business momentum.