# Net Annual Recurring Revenue Added

Date created: Oct 12, 2022  •   Last updated: Oct 12, 2022

## What is Net Annual Recurring Revenue Added?

Net Annual Recurring Revenue (ARR) Added is the net change of annual recurring revenue from new logo bookings, expansion bookings, downsell bookings, and churn during a period. This metric will let you evaluate your business from one time period to the next and understand how each component is affecting ARR.

### Net Annual Recurring Revenue Added Formula

ƒ Sum(New logo ARR bookings) + Sum(new expansion ARR bookings) – Sum(Down sell bookings) – Sum(Churn)

### How to calculate Net Annual Recurring Revenue Added

Company A had \$800,000 in ARR at the end of Year 1. During Year 2, the company had 10 new customers (\$50,000 each), \$75,000 worth of expansion revenue from upgrades, 2 churned customers (\$50,000 each), and \$25,000 worth of down sell bookings. Net ARR added = (\$50,000 x 10) + \$75,000 - \$25,000 – (\$50,000 x 2) = \$450,000. At the end of year 2 after experiencing both contraction and incremental ARR, Company A had a positive net ARR added of \$450,000.

Use Klipfolio PowerMetrics, our free analytics tool, to monitor your data.

### How to visualize Net Annual Recurring Revenue Added?

Visualizing Net Annual Recurring Revenue Added with a bar chart can help you segment your data by year. This will allow you to effectively see the impact of your strategy year over year.

### Net Annual Recurring Revenue Added visualization example

#### Bar Chart

Here's an example of how to visualize your Net Annual Recurring Revenue Added data in a bar chart to observe segmented data.