👋 Hi, it’s CJ Gustafson and welcome to Mostly Metrics, my weekly newsletter where I unpack how the world’s best CFOs and business experts use metrics to make better decisions.
Net New ARR measures changes in Total ARR from one period to the next.
Total ARR = big blue bars. Net New ARR = orange lines showing the delta from period to period
If you’ve ever seen an ARR waterfall, this is what goes on between the lines.
Sounds simple in theory. But in practice, there are a thousand little feet kicking under the surface. It’s not just a single number, but a combination of different revenue flows that provide insight into how well a company is growing.
To “double click” on the chart above (punches self in face), the orange line can be broken into sub components
That’s why I brought in an expert to help with today’s post - Bobby Pinero - founder and CEO of Equals. After experiencing the pains of being the first finance and data hire at Intercom, wrestling messy transaction data from Stripe, ERPs, and Data warehouses, he started Equals to solve the ARR problem. Take it away, Bobby:
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