ARR waterfall decomposition calculator
Break your ARR change into its four components — new logos, expansion, contraction, and churn — to see the classic waterfall view boards and investors expect.
Enter your starting ARR and each movement component. The calculator shows exactly how each lever contributed to your ending ARR and which one had the greatest impact on net new ARR.
ARR waterfall calculator inputs and results
How the ARR waterfall works
The ARR waterfall is the standard SaaS reporting format for explaining ARR movement to investors and boards. It decomposes net new ARR into four discrete, mutually exclusive components. New-logo and expansion ARR are gross gains; contraction and churn are gross losses. Net new ARR is the difference, and ending ARR is starting ARR plus net new ARR.
Tracking these four components separately over time reveals patterns that a single growth number obscures. A company with 30% ARR growth driven mostly by expansion from a large, happy existing base is very different from one achieving the same growth by acquiring new logos at a pace that's masking a serious churn problem. The waterfall makes that distinction visible.
The "biggest lever" callout flags which single component has the highest dollar impact on gross new ARR. For most companies at Series A and beyond, this is new-logo ARR. When expansion overtakes new-logo as the primary growth driver, it's often a sign of strong product-led growth or a maturing enterprise motion with meaningful upsell — and it's the combination investors most want to see as companies scale, since expansion revenue comes at near-zero incremental CAC.
About this tool
This tool decomposes ARR growth into its four components: new-logo ARR, expansion ARR, contraction ARR, and churned ARR — the standard SaaS waterfall view used by investors and boards. Inputs: starting ARR, new-logo ARR, expansion ARR, contraction ARR, churned ARR. Output: ending ARR, net new ARR, waterfall breakdown by component, and the largest lever.
Frequently asked questions
What is an ARR waterfall?
An ARR waterfall is a visual breakdown of how your Annual Recurring Revenue changed over a period — typically a quarter or a year. It starts with your beginning ARR, then shows each component that added to it (new logos, expansion) or subtracted from it (contraction, churn), and ends with your closing ARR. The waterfall format makes it immediately clear which forces are driving growth and which are working against it.
What counts as each component?
New-logo ARR is revenue from customers who weren't customers at the start of the period. Expansion ARR is additional revenue from existing customers — upgrades, more seats, more usage. Contraction ARR is a reduction in revenue from existing customers who downgraded but didn't cancel. Churned ARR is revenue fully lost from customers who cancelled entirely. These four components are mutually exclusive and together explain 100% of the change in ARR.
How do I use this for board reporting?
Enter your period-start ARR and each of the four movement components. The waterfall view lets you show the board not just "we grew ARR by X%" but "here's exactly what drove that growth and what we lost." It makes conversations about churn, expansion efficiency, and new-logo acquisition much more concrete. Most boards review this monthly or quarterly.
What's a healthy balance between new-logo and expansion ARR?
Early-stage companies rely almost entirely on new-logo ARR since there's little existing base to expand. As the business scales, a healthy expansion contribution — often 20–40% of gross new ARR — indicates product stickiness and upsell motion. Companies where expansion ARR is the dominant growth driver tend to have lower CAC and higher NRR, which investors value highly. If churn is large relative to the other components, it signals a retention problem that will compound as the base grows.