Formula
Net new ARR = closing ARR − opening ARR (excluding any restatement)
= new + expansion + reactivation
− contraction − churn ± FX impactWorked example
Figures from the sample company in every trial. Northwind Analytics (sample), September 2026. Each line is the month’s MRR movement × 12.
| Line | USD |
|---|---|
| Opening ARR, 31 Aug | 1,772,496 |
| New business | 5,520 |
| Expansion | 158,412 |
| Reactivation | – |
| Contraction | – |
| Churn | (10,440) |
| FX impact | 7,368 |
| Closing ARR, 30 Sep | 1,933,356 |
Net new ARR = 1,933,356 − 1,772,496 = 160,860
At constant currency = 160,860 − 7,368 = 153,492
Present the components
Net new ARR is a single figure that can hide offsetting movements. Present it with gross new ARR (new business and reactivation), expansion, and gross churned ARR (contraction and churn). An unchanged net figure can conceal rising churn absorbed by stronger acquisition.
Constant currency
For a multi-currency book, report net new ARR at constant currency and show FX impact on its own line. Ratios built on net new ARR, such as the burn multiple and the magic number, should use the constant-currency figure.
Periods
Quarterly net new ARR is the sum of three monthly figures and equals closing ARR at quarter end less closing ARR at the previous quarter end. If a closed month has been revised, the difference is presented as a restatement line, outside the movements.
How Revnewed calculates it
Net new ARR for the month is closing ARR less opening ARR, shown on the overview and in the board pack. The ARR bridge sets out each movement and the FX line, so the constant-currency figure can be read directly.
Board packs include ARR bridges over 1, 3 and 12 months.
Common misstatements
- Bookings reported as net new ARR
- A signed contract changes ARR when its service period starts, not when it is signed.
- Translation inside growth
- Exchange-rate gains overstate net new ARR when the reporting currency weakens, and losses understate it when it strengthens.
- The net figure alone
- Without its components, net new ARR cannot distinguish a strong period from one where acquisition masked churn.