Net New recurring revenue (ARR or MRR) is the change in recurring revenue from one period to the next. Therefore:

‍

‍

Net New ARR is the best metric for understanding ARR trajectory. If Net New ARR is steadily increasing each quarter, the company is accelerating and a high growth rate can likely be sustained. However, flat Net New ARR is an early indicator that growth is starting to decline. While the year over year growth might still look good, if Net New ARR is flat, the growth rate will start to drop quickly.