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ARR Waterfall Calculator
Build an ARR waterfall: starting ARR + new + expansion - contraction - churn = ending ARR.
An ARR waterfall reconciles a starting ARR snapshot to an ending ARR snapshot using ARR movements: new, expansion, contraction, and churned ARR.
It's a practical reporting template and a clean way to compute net new ARR and ARR growth for a period.
Prefer an explanation- Read the guide.
ARR waterfall: reconcile starting ARR to ending ARR (net new ARR)ARR guide: meaning, formula, MRR, bookings, and growthNet new ARR: definition, formula, and how to calculate itARR growth rate: how to measure recurring momentum
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Tip: you can type commas (e.g., 10,000).
Example
Using the default inputs, the result is:
$2,640,000.00
- Starting ARR (beginning of period)
- $2,400,000
- New ARR
- $240,000
- Expansion ARR
- $160,000
- Contraction ARR
- $60,000
- Churned ARR
- $100,000
How to calculate
- Enter starting ARR for the period.
- Enter ARR movements: new, expansion, contraction, churned.
- Review ending ARR, net new ARR, and ARR growth rate.
Formula
Ending ARR = starting ARR + new + expansion - contraction - churn; Net new ARR = new + expansion - contraction - churn
- All inputs represent the same period and use the same ARR definition (clean recurring run-rate).
- This is a reporting bridge; it does not model intra-period timing or cohort curves.
FAQ
Is net new ARR the same as ARR growth-
Net new ARR is a dollar amount (Delta ARR). ARR growth rate is net new ARR divided by starting ARR for the period.
Should I segment the waterfall-
Yes when possible. Segment by plan, channel, and customer size so blended numbers don't hide churn pockets or weak cohorts.
Common mistakes
- Mixing bookings/cash with ARR movements (different timing and definitions).
- Using inconsistent definitions for 'recurring' ARR across periods.
- Hiding segment problems with blended numbers (segment by plan/channel).
How to interpret
ARR waterfall tips
- Use it quarterly if monthly snapshots are noisy due to deal timing.
- Pair ARR movement with retention (NRR/GRR) to judge durability.
- Pair with burn multiple and payback to judge cash efficiency.
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Quick checks
- Keep time units consistent (monthly vs annual) across inputs and outputs.
- Segment by cohort/channel/plan before trusting a blended average.
- Use the related guide to avoid common definition and denominator mismatches.