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: 

1. 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.

2. 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.

3. 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.

4. 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. 

 

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 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. 

Change Categories

Each Stacked Bar in the ARR Momentum chart shows the total ARR amount in the fiscal period.

 

There are the following Change Categories derived from the Change Type field in each active order product: 

 

ARR Change Category	Change Type	Condition
New Business	N/A
Renewal	Renew Subscription
Upsell/Expansion	Update Quantity Update Term	Change in Quantity > 0
Downsell/Contraction	Update Quantity Update Term	Change in Quantity < 0
Cancel/Churn	Cancel Subscription
Cross-Sell	New Product