Net New ARR by Parent

The net new ARR from parent accounts that became active during the period and from parent accounts whose ARR expanded during the period, minus the ARR from parent accounts whose ARR contracted during the period and from parent accounts that churned during the period.

What is Net New ARR by Parent?

Net New Annualized Recurring Revenue by Parent Accounts (Net New ARR by Parent) is a comprehensive metric that represents the overall change in Annualized Recurring Revenue during a specific period. This metric accounts for growth from newly acquired parent accounts (new logo) and existing parent accounts who have expanded their ARR (expansion), as well as losses due to parent accounts contractions (contraction) and churned parent accounts (churn). It offers a holistic view of the net increase or decrease in a company's recurring revenue.

The Importance of Measuring Net New ARR by Parent

Net New ARR by Parent is crucial for several reasons:

Revenue Performance Overview: It provides a complete picture of the company's revenue performance and growth dynamics.
Growth Indication: A positive Net New ARR by Parent indicates healthy growth and a robust revenue engine, showing that the company is gaining more revenue than it is losing.
Strategic Decision-Making: Analyzing the components of Net New ARR by Parent (New Logo, Expansion, Contraction, Churn) helps identify specific drivers of revenue changes, guiding strategic decisions in customer acquisition, upselling, retention, and customer success initiatives.
Effectiveness Evaluation: Regular tracking of Net New ARR by Parent allows businesses to evaluate the effectiveness of their revenue-generating strategies and align their sales, marketing, and customer success efforts for sustainable growth.

How is Net New ARR by Parent Calculated?

Net New ARR by Parent is calculated by considering the cumulative impact of various changes in ARR across different customer categories during the specified period:

Formula

Net New ARR by Parent = New logo ARR by Parent + Expansion ARR by Parent - Contraction ARR by Parent - Churned ARR by Parent In essence, Net New ARR by Parent is a vital metric that captures the net outcome of a company's efforts in growing its customer base and managing existing customer relationships. It's a key indicator of the health and trajectory of a company's recurring revenue streams.

Also known as: Net New ARR by Parent Accounts