New ARR by Parent

What is New ARR by Parent?

New Annualized Recurring Revenue by Parent Accounts (New ARR by Parent) is a critical metric that represents the incremental revenue generated from two key sources: newly acquired customer accounts and the additional revenue from existing customers who have expanded their ARR during a specific period. It's a composite metric that combines revenue from fresh market penetrations and expansions within the current customer base.

The Importance of Measuring New ARR by Parent

Measuring New ARR by Parent is vital for several reasons:

• Growth Indicator: It's a direct measure of a company's success in attracting new customers and expanding business with existing clients.
• Sales and Marketing Effectiveness: New ARR by Parent provides insights into the effectiveness of sales and marketing strategies in acquiring new business and account executives' performance in growing current business.
• Market Expansion Insights: A robust and growing New ARR by Parent suggests successful market penetration and the ability to tap into new segments.
• Revenue Growth Projection: Understanding the contribution of new and expanding customers to recurring revenue allows businesses to set realistic growth targets and fine-tune their sales and marketing strategies accordingly.

How is New ARR by Parent Calculated?

The calculation of New ARR by Parent involves two main components:

• New Logo ARR: Revenue from parent accounts that were not contributing to ARR in the preceding period.
• Expansion ARR: Additional revenue from existing parent accounts who have expanded their ARR during the current period.

Formula

New ARR by Parent = New logo ARR by Parent + Expansion ARR by Parent In summary, New ARR by Parent is a comprehensive metric that reflects a company's growth dynamics and its ability to both attract new customers and increase business with existing ones. It's a crucial indicator for assessing overall business health and strategic planning in the SaaS industry.