Starting ARR
Definition
Opening ARR at the beginning of the period — the baseline against which the period's ARR waterfall (new + expansion − downgrades − churn) reconciles to ending ARR. Equal to the prior period's closing ARR by construction. The FlowSubform widget binds starting_arr as the `start` slot of the ARR-bridge flow, and the ending position is computed as start + Σ(deltas). Common pitfall: restating starting_arr mid-period to "fix" a prior-period reporting error breaks the period-over-period audit trail; corrections should land as a separate restatement note, not by editing the opening balance.
Why it matters
The anchor of the ARR waterfall — without an explicit starting point, the period's net-new ARR cannot be audited. Boards expect the waterfall to reconcile to the penny, period over period.
How it's calculated
Starting ARR = ARR snapshot at period open = the prior period's closing ARR. Identity that must hold: starting_arr + new_business + expansion − downgrades − churn_arr = ending ARR (sales.arr at period close). Reconcile any gap as a "data quality" line and root-cause it before next period. How to interpret it
If starting_arr ≠ prior-period ending ARR, there is either a restatement or a data issue — surface it explicitly. Beyond that the value itself is descriptive, not interpretive; the interpretive work happens on the delta lines.
Source
imboard Editorial
Stage relevance
Typically owned by
Related KPIs
Annual Recurring Revenue — the value of all recurring subscription revenue normalized to a one-year run-rate as of the period close. The headline operating metric for a subscription business; every growth and efficiency ratio (NRR, GRR, magic number, CAC payback, Rule of 40) is calibrated against it. Excludes one-time fees, professional services, and non-contractual usage. Common pitfall: confusing ARR (contracted recurring) with revenue (recognized) or with CARR (contracted incl. not-yet-live) — the SMSB standard draws sharp lines between them, and boards expect the same discipline. The KpiVarianceTable widget surfaces forecast / actual / variance / status / future-forecast columns against the same field.
Annualized recurring revenue booked from net-new logos (first-time customers) during the period. This is the "hunt" line of the ARR waterfall — the output of the new-customer acquisition motion, distinct from expansion (existing-customer upsell) and from churn / downgrades. Common pitfall: counting renewals or expansion deals as new business inflates the new-logo conversion engine and hides a stalled acquisition motion. The KpiVarianceTable widget shows period forecast vs actual; downstream views compare it to S&M spend to derive new-business CAC and CAC payback.
Annualized recurring revenue added during the period from existing customers — through upsell (more seats / higher tier), cross-sell (additional products), or price increases. The "farm" line of the ARR waterfall. Boards read this as the leading indicator that product-market fit has translated into product-account fit and that the post-sale motion is creating compound growth. Common pitfall: classifying contractual price-step-ups (CPI escalators baked into the original contract) as expansion overstates new selling motion. Expansion CAC Ratio and Net Revenue Retention are derived from this number.
Annualized recurring revenue lost during the period from customers who fully cancelled — terminating their contract or letting it lapse without renewal. The "leak" line of the ARR waterfall and the denominator of Gross Revenue Retention. Distinct from Downgrade ARR (sales.downgrades) which captures contractions where the customer stays. Common pitfall: lumping mid-term cancellations with non-renewals masks two very different retention failures — surface them separately when material. The KpiVarianceTable widget tracks period forecast vs actual; a widening miss against forecast is the earliest signal of a retention problem.
Annualized recurring revenue lost from existing customers who reduced spend mid-term or at renewal (seat reductions, tier downgrades, removed modules) — without leaving entirely. The "contraction" line of the ARR waterfall, distinct from full churn. Often a more sensitive leading indicator than churn because customers tend to contract before they cancel. Common pitfall: lumping downgrades into churn obscures the early-warning signal — boards looking only at logo churn miss the slow-bleed pattern. Surfaces in the KpiVarianceTable widget alongside expansion and churn so the net-retention math is auditable.
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