ARR Momentum

the arr momentum provides a visual representation of a company's annual recurring revenue (arr) over time it shows the monthly or quarterly arr numbers on the y axis and the time period on the x axis the arr momentum is one of the most iportant reports for businesses running a recurring services model it helps finance users with the following easy tracking of revenue growth by visualizing the arr numbers over time, companies can easily track their revenue growth and identify trends or changes in their revenue streams identification of problem areas the chart can help companies identify areas where their revenue growth is lagging or where they may be losing subscribers, allowing them to take corrective action improved decision making with a clear understanding of their revenue momentum, companies can make better informed decisions about resource allocation, product development, and marketing strategies communication with stakeholders the chart can be a powerful communication tool for sharing revenue performance with investors, board members, and other stakeholders aggregated arr = delta mrr 12 where, delta mrr includes the mrr on the 1st day of the month for all of the below items mrr from existing subscriptions mrr from new booking mrr from expansions upsells and cross sells mrr lost from contractions downsells mrr lost from churn cancellations the following image shows an example of the arr momentum chart docid 7b1484f77d0b447fa08ff1acd31b3a84fd042c18 chart definition arr momentum chart is a mixed stacked bar chart with a line component description x axis month/year in the form of mm/yyyy and is tilted y axis stacked bar shows the total arr in each change category of the fiscal period arr amount can be negative line shows the total arr of the fiscal period (month or quarter) stacked bar the bar is a stacked bar it shows the arr by change type it’s stacked by change type in the legend below the chart, we’ll show new business renew renew with quantity update convert free trial update quantity (positive or negative) update term (positive or negative) co term (positive or negative) cancel (negative) pause (negative) resume line the line is the aggregated arr it goes cross with the stacked bars currency and time period filter currency is served as filter currently we will default to the corporate currency time period is served as grouping method currently, we’ll support 1m, 1q and 1y when selected, the chart as well as the report will be refreshed docid 7b1484f77d0b447fa08ff1acd31b3a84fd042c18 change categories each stacked bar in the arr momentum chart shows the total arr amount in the fiscal period how change types are mapped to change categories when modifying an order or subscription, different change types are automatically categorized into broader change categories this helps standardize how changes are classified, making it easier for businesses to track revenue impacts such as upsells, downsells, and renewals change categories overview each change made to an order falls into one of the following categories new business – a new order or subscription renewal – extending an existing subscription renewal with quantity update extending an existing subscription with quantity updates upsell/expansion – increasing the arr value by adding products, increasing quantities, or adjusting prices upward downsell/contraction – reducing the arr value by lowering quantities or adjusting prices downward cross sell – adding a new product to an existing subscription convert free trial converting a $0 free trial into a paid subscription cancel/churn – canceling a subscription change type to change category mapping please refer to the table below to understand how change types are converted to change category change type change category description (no value) new business default when no change type is specified, indicating a new order renew renewal extending an existing subscription updatequantity upsell (if quantity ≥ 0) / downsell (if quantity < 0) adjusting the number of units updateterm upsell (if quantity ≥ 0) / downsell (if quantity < 0) modifying the subscription term coterm upsell (if quantity ≥ 0) / downsell (if quantity < 0) aligning the term of different subscriptions updatetermforevergreen upsell (if quantity ≥ 0) / downsell (if quantity < 0) changing the term for an evergreen subscription cotermforevergreen upsell (if quantity ≥ 0) / downsell (if quantity < 0) co terminating evergreen subscriptions adjustprice upsell (if net sales price ≥ 0) / downsell (if net sales price < 0) adjusting the price of an item newproduct cross sell adding a new product convertfreetrial free trial conversion converting a $0 free trial subscription into a paid subscription cancel cancel/churn cancelling a subscription example scenarios scenario change type resulting change category a customer renews their subscription renew renewal a customer renews their subscription and adds or reduces quantity of seats upon renewal renew with quantity update renewal with quantity update a customer increases the quantity of seats updatequantity (≥0) upsell a customer removes users from their plan updatequantity (<0) downsell a customer adds a new product newproduct cross sell a price increase is applied to an item adjustprice (≥0) upsell a $0 free trial is converted to a paid subscription convertfreetrial free trial conversion a customer cancels their order cancel cancel/churn why change category matters accurate revenue reporting by categorizing changes correctly, finance and revops teams can track revenue expansion, contraction, and churn clear business insights helps teams understand trends in customer behavior, such as upsell opportunities or cancellation risks automation & consistency ensures that every order modification is classified in a structured and predictable way