Net New ARR Calculator

What is Net New ARR?

Net new ARR is the ARR added in a period after new logos, expansion, churn, and contraction. It is the growth engine number that feeds burn multiple, magic number, and board ARR bridges.

Formula

Version v1. See methodology and the public formula repo for sources and change history.

Worked example

Using the default example inputs (New ARR: $1,000,000; Expansion ARR: $300,000; Churned ARR: $150,000; Contraction ARR: $50,000), Net New ARR equals $1,100,000 (Net new ARR). Net new ARR isolates true ARR creation after retention drag.

What good looks like

Healthy companies show balanced components. Over-reliance on new ARR with weak expansion can signal retention risk. Pair with NRR and pipeline coverage for GTM planning.

Directional guidance only, not a cohort benchmark claim. Premium cohort bands appear when sample thresholds are met for your profile.

FAQ

What is Net New ARR?

Net new ARR is the ARR added in a period after new logos, expansion, churn, and contraction. It is the growth engine number that feeds burn multiple, magic number, and board ARR bridges.

What is the Net New ARR formula?

Net new ARR = New ARR + Expansion ARR - Churned ARR - Contraction ARR

Net new ARR vs new ARR?

New ARR is only from new customers; net new ARR nets churn and contraction against new plus expansion.

How does this tie to burn multiple?

Burn multiple divides net burn by net new ARR. Use the same net new ARR definition in both places.

Bookings vs ARR?

Use recognized or live ARR per your finance policy; bookings timing can diverge from ARR bridges.