Net New ARR
The change in ARR over a period: new plus expansion minus contraction minus churn. The headline growth number.
Decompose it or it misleads
Two companies posting identical net new ARR can be in opposite conditions — one growing on new logos with heavy churn, the other on expansion with almost none. The net figure conceals which, and the two require different responses.
Report the four components
RELATED TERMS
Annual Recurring Revenue (ARR)
The annualised value of recurring subscription revenue at a point in time. A run rate, not a measure of revenue earned during a period.
Expansion Revenue
Additional recurring revenue from existing customers: more seats, higher tiers, additional products or increased usage.
Contraction MRR
Recurring revenue lost from customers who stayed but reduced spend — fewer seats, a lower tier, a renegotiated rate.
Churn
Customers or revenue lost over a period. The leak determining whether acquisition compounds or merely replaces.
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