Net New Annual Recurring Revenue
Definition
Net New ARR shows the change in recurring annual revenue.
The metric combines new and additional ARR with losses from cancellations and contract reductions. All components must be recorded according to the same definition.
Simply explained
Newly acquired recurring business is offset against lost recurring revenue.
Why it matters in practice
This makes it clear whether the contract business is growing overall.
Example from business
Hypothetical: €20,000 new and €5,000 additional ARR minus €8,000 loss results in €17,000 Net New ARR.
Limits and pitfalls
- One-time revenues do not belong here. Exchange rates and contract changes can distort comparisons.
Origin & history
The metric originates from managing subscription and SaaS businesses.
Use in mid-sized companies
- SMEs with recurring contracts can jointly consider growth and churn.
Frequently asked questions
Is Net New ARR equal to new revenue from new customers?
No, changes in existing contracts also count.
Sources
- Annual recurring revenue — · ChartMogul: Annual recurring revenue —
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