What is net new MRR?
Net new MRR is the monthly counterpart to net new ARR: the sum of all the ways recurring revenue moved in a month, netted to one number. It cuts through gross additions to show real momentum.
A strong new-business month means little if churn erased most of it. Net new MRR captures that, which is why it, not gross new MRR, is the honest growth signal.
Short answer
Net new MRR is the true change in monthly recurring revenue in a period. Add new MRR from new customers and expansion MRR from existing ones, then subtract churned MRR from cancellations and contraction MRR from downgrades. It is the clearest single measure of monthly growth momentum, because it nets gains against losses.
Key takeaways
- New MRR plus expansion MRR minus churned minus contraction.
- The true monthly change in recurring revenue.
- Nets gains against losses for an honest read.
- The clearest single measure of growth momentum.
Why net, not gross
Gross new MRR counts only additions and ignores what you lost. A month of 100,000 dollars new MRR looks great until you see 70,000 dollars of churn, leaving 30,000 dollars of net new MRR. Netting the components is what makes the number honest.
Breaking net new MRR into its four parts also shows the story: whether growth came from new logos, expansion, or simply lower churn. The composition matters as much as the total.
How Ardovo handles it
Ardovo computes net new MRR and its four components in real time from billing, so momentum is always current and always explained. Rook flags when a strong new-business month is being eroded by rising churn or contraction.
Frequently asked questions
What is the net new MRR formula?
New MRR plus expansion MRR minus churned MRR minus contraction MRR. It nets the four ways recurring revenue moves into one number, the true monthly change and the clearest measure of growth momentum.
Why use net new MRR instead of gross new MRR?
Because gross new MRR ignores churn and contraction, overstating growth. Net new MRR subtracts losses, so a strong new-business month eroded by churn is shown honestly rather than flattered.
What do the components of net new MRR tell you?
They reveal the source of growth: new logos, expansion within the base, or reduced churn. Two months with the same net new MRR can have very different compositions and very different implications.