Definition
It is the net increase in Annual Recurring Revenue over a certain period (a month, a quarter, a year): the ARR at the end of the period minus the ARR at the beginning of the period
It is calculated as
[ARR at the end of the period] - [ARR at the beginning of the period]
Or, alternatively, as
[ARR from new customers] + [Expansion ARR from existing customers] – [Churned ARR] Where:
- Expansion ARR means upsells and cross-sells
- Churned ARR means downsells and non-renewals