Net New Live ARR

What it measures

The arithmetic sum of four flows inside the live, currently-billing customer base over a period: new-customer go-lives, existing-customer expansion, existing-customer contraction, and churn — each annualized. It is the live-only counterpart to Net New ARR: the same waterfall, restricted to contracts that have started billing rather than everything booked, so it moves with cash you are actually recognizing today.

Why it matters

Net New Live ARR answers one question: how much annualized recurring revenue did the contracts we are actually billing add or shed this period? Restricting the waterfall to live contracts ties the number to cash you are recognizing now, not to forward bookings that haven't switched on yet. That makes it the cleanest read on whether the active base is compounding or leaking, and a direct driver of Net Revenue Retention — a quarter can post strong total bookings while Net New Live ARR goes flat because the new deals don't go live until next quarter, or because churn inside the live base is quietly eating the gains.

How to read it

Net New Live ARR > 0 means the live base added more annualized recurring revenue than it lost; < 0 means it is shrinking. Never read the net alone — +$70K looks healthy until you see it came from $120K of new go-lives against $80K of churn, a leaky base masked by new-logo activation. Break it into its four flows every time, compare to the prior period and to plan, and read it next to live customer count and Net Revenue Retention: rising Net New Live ARR with NRR above 100% means the active base is expanding on its own merits; positive Net New Live ARR but NRR drifting below 100% means new go-lives are papering over churn and contraction in the existing live accounts.

What good looks like

Watch-outs

• Confusing Net New Live ARR with Net New ARR. Net New ARR counts contracts the moment they're booked; Net New Live ARR counts them only once they go live and start billing. A forward-heavy bookings quarter can spike Net New ARR while Net New Live ARR stays flat — always clarify which you're reporting before anyone reads momentum into it.
• Reading the net without the four flows. A flat or even positive Net New Live ARR can sit on top of $120K of new go-lives against $80K of churn — a leaky live base hidden by new-logo activation. Always report new, upsell, downsell, and churn as separate lines.
• Letting expansion mask rising contraction. Strong Upsell Live ARR can hide an accelerating Downsell Live ARR inside the net. A $10M expansion that nets $8M because downsells doubled is a warning sign — inspect inflows and outflows separately, not just the difference.
• Forgetting to annualize mid-period changes. A live contract upgraded mid-quarter contributes only its incremental annualized value from the effective date forward, not a full month times twelve or a partial quarter scaled up — mis-annualizing overstates or understates the flow.

Worked example