New Annual Recurring Revenue (ARR) is a metric that represents the annual recurring revenue generated by the company's newest customers or customers that have just upgraded their plans, calculated over a given period. It helps businesses understand how much revenue they're generating from new customers and how they're contributing to the company's revenue growth. This metric is essential for predicting future revenue growth and making informed decisions about marketing and sales strategies. We calculate New ARR by considering all 'active,' 'past due,' and 'canceled' subscriptions created within the selected date range. For currently 'active' subscriptions, we save the data based on their 'created' date. For subscriptions that are currently either 'past due' or 'canceled,' we save the data based on the date when they transitioned to 'active.' In the case of subscriptions that transitioned from 'trial' to 'active,' we save the data based on their 'trial_end' date. Additionally, we subtract all applicable discounts from these subscriptions. Limitaitions: We always extend the selected date range by two months in the past at its beginning. This extension ensures that we include subscriptions created outside of the selected date range as 'trial' subscriptions that later transitioned to 'active' subscriptions within the selected date range. However, it's important to acknowledge that slight discrepancies may be present due to API limitations. Specifically, we cannot exclude subscriptions created for existing customers after their previous subscription was canceled due to failed payments.
Example: A SaaS company uses New ARR metric to track revenue generated from new customers during a specific time period, allowing them to measure sales performance and forecast growth potential.