How To Calculate Net Annual Recurring Revenue in Nextiva | Arithmix

Calculating net annual recurring revenue (NARR) is an essential metric for any business that offers subscription-based services. It helps to determine the growth rate of the business and the overall health of the company. In this article, we will discuss what NARR is, why it is valuable to calculate it, and how to calculate it in Nextiva.

What Is Net Annual Recurring Revenue?

Net Annual Recurring Revenue (NARR) is the amount of revenue a company generates from its subscription-based services over a year, minus any cancellations, refunds, or discounts. It is a crucial metric for businesses that offer subscription-based services, such as software-as-a-service (SaaS) companies, as it helps to determine the growth rate of the business and the overall health of the company.

NARR is calculated by multiplying the total number of active subscriptions by the average revenue per user (ARPU) and then subtracting any cancellations, refunds, or discounts. The resulting figure is the net annual recurring revenue.

When Is It Valuable To Calculate Net Annual Recurring Revenue?

Calculating NARR is valuable for businesses that offer subscription-based services as it provides insight into the growth rate of the business and the overall health of the company. It helps businesses to identify areas of improvement and make data-driven decisions to increase revenue and profitability.

By calculating NARR, businesses can also determine the lifetime value of a customer (LTV), which is the total revenue a customer is expected to generate over their lifetime with the business. This information can help businesses to identify high-value customers and tailor their marketing and retention strategies accordingly.

How to Calculate Net Annual Recurring Revenue in Nextiva

Calculating NARR in Nextiva is a straightforward process. Follow these steps:

1. Log in to your Nextiva account.
2. Click on the "Reports" tab in the top menu.
3. Select "Revenue" from the left-hand menu.
4. Choose the date range for which you want to calculate NARR.
5. Click on "Export" to download the report.
6. Open the report in a spreadsheet program such as Microsoft Excel.
7. Calculate the total revenue generated from subscription-based services for the selected date range.
8. Calculate the total number of active subscriptions for the selected date range.
9. Calculate the average revenue per user (ARPU) by dividing the total revenue by the total number of active subscriptions.
10. Subtract any cancellations, refunds, or discounts from the total revenue to get the net annual recurring revenue (NARR).

By following these simple steps, you can calculate NARR in Nextiva and gain valuable insights into the growth rate of your business and the overall health of your company.

How Do You Calculate Net Annual Recurring Revenue in Nextiva

Nextiva itself isn’t naturally geared towards letting you calculate complex metrics like Net Annual Recurring Revenue. As an alternative, teams typically use products like Arithmix to import data from Nextiva and build out dashboards.

What is Arithmix?

Arithmix is the next generation spreadsheet - a collaborative, web-based platform for working with numbers that’s powerful yet easy to use. With Arithmix you can import data from systems like Nextiva, combine it with data from other systems, and create calculations like Net Annual Recurring Revenue.

In Arithmix, data is organized into Tables and referenced by name, not by cell location like a spreadsheet, simplifying calculation creation. Data and calculations can be shared with others and re-used like building blocks, vastly streamlining analysis, model building, and reporting in a highly scalable and easy to maintain platform. Data can be edited, categorized (by dimensions) and freely pivoted. Calculations are automatically copied across a dimension - eliminating copy and paste of formulas.

Arithmix is fully collaborative, giving your entire team access to your numbers and the ability to work together seamlessly.

Calculating Net Annual Recurring Revenue in Arithmix

Calculating metrics like Net Annual Recurring Revenue is simple in Arithmix. Once you've created your free account, you’ll be able to import your Nextiva data, and use it to create natural language formulas for metrics like Net Annual Recurring Revenue.

Arithmix is designed to give you the power to build any calculations you want on top of your Nextiva data, while also being easy to use and collaborate on. You can share your dashboards with users inside and outside of your organisation, making it easy to empower your whole team.