Net New ARR Calculator
Calculate net new ARR from new, expansion, contraction, and churned ARR movements.
Net new ARR is the net change in recurring run-rate over a period after you add new and expansion ARR and subtract contraction and churned ARR.
It's commonly used in efficiency metrics like burn multiple and the SaaS magic number.
Prefer an explanation- Read the guide.
Net new ARR: definition, formula, and how to calculate itARR waterfall: reconcile starting ARR to ending ARR (net new ARR)Bookings vs ARR: what ARR means (and what it doesn't)ARR growth rate: how to measure recurring momentum
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Used to compute net new ARR growth rate.
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Tip: you can type commas (e.g., 10,000).
Example
Using the default inputs, the result is:
$240,000.00
- New ARR
- $240,000
- Expansion ARR
- $160,000
- Contraction ARR
- $60,000
- Churned ARR
- $100,000
- Starting ARR (optional)
- $0
How to calculate
- Measure new ARR added in the period (from new customers).
- Measure expansion ARR (upsells, seats, add-ons) from existing customers.
- Subtract contraction ARR and churned ARR (downgrades and cancellations).
- Net new ARR is the net change in ARR for the period.
Formula
Net new ARR = new ARR + expansion ARR - contraction ARR - churned ARR
- All movements are measured for the same period using a consistent ARR definition.
- ARR is treated as recurring run-rate (not recognized revenue).
FAQ
Is net new ARR the same as ARR growth rate-
Net new ARR is a dollar change (Delta ARR). Growth rate is net new ARR divided by starting ARR for the period.
How is net new ARR used for burn multiple-
Burn multiple compares net cash burn to net new ARR for the same period (often quarterly). Lower burn multiple means better growth efficiency.
Common mistakes
- Mixing bookings/cash with ARR movements (different timing and definitions).
- Using inconsistent windows (monthly movements, quarterly reporting).
- Counting one-time fees/services as recurring ARR.
How to interpret
Net new ARR tips
- Compute it on a consistent cadence (quarterly is common) to reduce noise.
- Segment by plan/channel to avoid blended numbers hiding churn pockets.
- Pair with retention (NRR/GRR) and payback to judge growth quality.
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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.