What it is
Net new ARR is the period change in ending ARR after new business, expansion, contraction, and churn. It answers “how much recurring base did we add (or lose) this period?” — not how much cash we collected.
How it’s calculated
Commonly: new ARR + expansion − contraction − churn. Some teams exclude reactivation or FX in a separate line. Document the formula next to the waterfall so net new ARR is not a second, conflicting model.
Where it breaks
It breaks when “new” is bookings ACV while expansion/churn are billing ARR, or when multi-year deals inflate one month’s net new without a ramp policy.
In the board pack
Show net new ARR as the rollup of waterfall components, not a standalone spreadsheet cell. Pair with burn multiple only when ARR definitions match.
Keep the written definition stable across close, the board pack, and diligence so the same word never means two math models.