New Business ARR
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. — Sales KPI, I'mBoard-authored (editorial tier).
I'mBoard-authored (editorial tier)
No public third-party standard anchors this KPI yet, so I'mBoard authors and maintains the definition — transparently labeled as editorial tier. See the ontology methodology for the published vs editorial tier system and the back-attribution workstream.
Rogue ID: sales.new_business
Type: Currency
Domain: Sales
Definition
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.
Formula
New Business ARR = Sum of ARR contracts signed during the period by customers who had zero prior ARR with the company. Excludes expansion, renewals, and reactivations. Aligns with the SMSB definition of new-logo ARR and pairs 1:1 with sales.new_customers_added for ASP analysis.Why it matters
Direct read on the health of the new-customer acquisition engine — separates "are we winning new logos" from "are existing customers expanding." Inputs the New CAC Ratio and CAC Payback calculations the board uses to judge sales efficiency.
How to interpret
New Business ARR running below plan for two consecutive quarters is the classic early-stage growth-stall signal — usually upstream pipeline coverage or win-rate problems. New Business as a share of total Net New ARR should be 60–80% pre-Series B and trends down to 40–60% post-Series B as expansion picks up (industry folk-wisdom, not citation-grade — verify against KBCM/Sapphire 2024 segmentation tables for the company stage band).
Calculation policy
How an AI agent should compute this KPI from messy company data. Free-text rules consumed at reasoning time — not a deterministic DSL. The most common ways to get this wrong are listed under Common miscomputations.
Inclusion rules
- Annualized contract value of net-new logos signed during the period (customers with zero prior ARR with the company).
- Multi-year contracts: use annualized value (TCV / term in years), not first-year billing.
- Same recurring-revenue definition as ARR: live / delivered subscription value only.
Exclusion rules
- Expansion deals from existing customers — those belong in
sales.expansion. - Renewals of existing customers — those are retention, not new business.
- Reactivated customers who previously churned: classify per company policy, but be consistent and disclose. Some firms count reactivations as new business, others as recovery.
- Bookings (signed but not yet live) — those are CARR. New Business is the live-ARR subset.
Required inputs
- CRM customer table with first-active-contract-date per account.
- Contract value annualized per account.
- Period boundaries (start/end dates).
Data-source priority
- CRM with explicit "first-time customer" flag or stable customer-since field.
- Manual classification from CFO/Rev-Ops when CRM customer-since isn't reliable.
Edge cases
- Account splits / parent-child relationships: count by the same logo-unit used elsewhere in the waterfall (typically parent organization).
- Customers who signed late in the period but went live in the next: defer to the period when ARR turns live (matches ARR semantics) — unless the company explicitly uses booking-date.
- Pilots that convert to paid: count from the first paid contract, not the pilot start.
Validation checks
- New Business ARR + Expansion − Churned − Downgrades = Net New ARR. The waterfall must reconcile to the ARR delta within 1%.
- New Business should pair 1:1 with
sales.new_customers_added— count and dollars track together; a large divergence indicates a logo-counting or classification error.
Common miscomputations
- Counting renewals as new business — most common error; inflates the new-logo motion narrative and breaks every downstream CAC ratio.
- Counting expansion deals from existing customers — same effect; also doubles up against the expansion line.
- Using bookings instead of live ARR — overstates by the implementation backlog (often 10-25% of new bookings).
- Logo-unit drift: parent-org-counted one quarter, sub-account-counted the next — produces phantom new-logo growth.
- Late-period signing counted in the wrong period when the live-vs-signing convention isn't pinned.
Related KPIs
sales.arrsales.new_customers_addedsales.avg_contract_valuesales.expansionsales.cacsales.new_cac_ratiosales.cac_payback_period
Source
I'mBoard editorial — authored and maintained by I'mBoard, first published 2026-04-01. No third-party standard is cited for this KPI; when one emerges, the definition is back-attributed and promoted to the published tier (a minor version bump). Read the ontology methodology for the published vs editorial tier system, attribution rules, and dispute process.
Stage relevance
| Company stage | Priority |
|---|---|
| Pre-Seed | Core |
| Seed | Core |
| Series A | Core |
| Series B | Core |
| Series C+ | Core |
| Public | Core |
Suggested for stages: Pre-Seed, Seed, Series A, Series B, Series C+, Public.
Default owning functions
- Sales
Machine-readable
- This KPI as JSON:
/api/ontology/sales/new_business.json - All Sales KPIs:
/api/ontology/sales.json - Full catalog:
/api/ontology/index.json
Median Deal Size
Median dollar value across active pipeline opportunities — the typical deal in the pipeline, robust against the few-big-deals skew that distorts the average. The honest read on the "core motion" deal-size; if the team is winning a few oversized deals but the median is shrinking, the underlying motion is degrading even though the topline numbers look fine. Common pitfall: omitting median in dashboards in favor of just the average lets concentration risk hide. A best-practice board pack always shows both. — Sales KPI, I'mBoard-authored (editorial tier).
New CAC Ratio
S&M expense attributable to new-customer acquisition divided by the new-customer CARR generated in the period. Per SMSB, the cleanest read on the new-logo acquisition engine's efficiency — strips out the expansion motion which has materially different unit economics. Common pitfall: failing to split AE comp time correctly between new and expansion activities — when the same AE owns both motions, an allocation rule (often the % of OTE tied to new-vs-expansion quota) is required and must be applied consistently quarter-over-quarter. — Sales KPI anchored to SaaS Metrics Standards Board.