Net New Contracted Users
The net change in contracted users over a period: new contracted users added minus contracted users churned.
◆ Count
Formula
Built from
What it measures
The period's aggregate change in your contracted user base. It nets gross additions against defection to show the true movement in committed user count — not how many you signed, but how many more (or fewer) you actually hold versus the start of the period.
Why it matters
NNCU is the unit-economics counterpart to revenue net-new: it tells you whether your installed base of committed users is growing or shrinking, independent of price. Finance and product leadership use it to judge the durability of demand — positive NNCU means you're building an installed base and a moat; negative means churn is outpacing acquisition and you're in triage. It also drives capacity planning, support staffing, and sales headcount, because what you must serve next quarter is this quarter's base plus NNCU.
How to read it
Read NNCU as a trend, not a single number. NNCU > 0 means acquisition is outrunning churn; NNCU < 0 means churn is winning and you should diagnose why (PMF decay, a competitive threat, pricing friction). Always compare it to gross new contracted users (NCU): high NNCU relative to NCU means you're retaining deeply, while low or negative NNCU on high NCU means your funnel leaks — you're filling a bucket with a hole in it. Also compare against Net New Users (NNU) to see whether contracted users are stickier than your broader user base, and against Net New ARR to catch the case where user count grows but contract value shrinks.
What good looks like
Good
NNCU is consistently positive and growing as a share of your starting contracted base, with gross adds comfortably outpacing churn quarter over quarter.
Watch
NNCU is flat or oscillating around zero, or still positive but shrinking relative to gross new users — a sign churn is rising or new-user quality is slipping.
Bad
NNCU is negative for two or more consecutive periods: churn has outpaced acquisition and the contracted base is contracting.
Watch-outs
- Reporting the period-end stock instead of the net flow. If you close with 100 contracted users but added 120 and churned 80, NNCU is +40, not 100 — count the deltas, never the ending balance.
- Double-counting status changes. Classify each user once per period; a lapsed user who re-contracts is one churn plus one new, not a single 'resurrection' that quietly nets to zero off the books.
- Inconsistent cut-off rules for mid-period and prorated sign-ups. Decide whether partial-period users are in or out, then apply the same rule to both the new and churned legs so the formula matches what contract ops actually records.
- Defining 'contracted' loosely. Mixing trial, freemium, and paid commitments inflates the count — state explicitly whether NNCU includes only paid contracts or also committed trials, and hold that definition constant across periods.
Worked example
Hypothetical
End Q1 with 500 contracted users. In Q2 you add 80 new contracted users and 30 churn, so NNCU is +50 and you close at 550. In Q3 you add 60 and churn 55, NNCU is +5 — momentum is slowing. In Q4 you add 40 and churn 60, NNCU is −20 and you fall to 475: churn has overtaken adds.
Variants & windows
The same metric re-expressed by a mechanical transform — a trailing window, a growth rate, a per-unit scaling, or a book/segment cut. Each is computed from Net New Contracted Users above.
- Net New Contracted Users Net new · Contracted book