How To Calculate Net ARR in Zendesk Sell | Arithmix

Calculating net annual recurring revenue (ARR) is an essential task for any business that wants to track its financial performance. Net ARR is the amount of revenue that a company generates from its recurring customers in a year, after accounting for any discounts, refunds, or cancellations. In Zendesk Sell, you can easily calculate your net ARR by following a few simple steps.

The first step is to gather all the data related to your recurring customers, including their subscription plans, renewal dates, and any changes in their subscription status. You can use Zendesk Sell's reporting features to generate a detailed report of your recurring customers and their subscription plans.

Next, you need to calculate the total revenue generated by your recurring customers in a year. This includes the revenue from their initial subscription and any renewals or upgrades they made during the year. You can use Zendesk Sell's revenue reporting features to calculate this amount.

Once you have the total revenue, you need to subtract any discounts, refunds, or cancellations that occurred during the year. This will give you the net revenue generated by your recurring customers in a year. Finally, you can divide this amount by the number of recurring customers you had during the year to get your net ARR.

What Is Net ARR?

Net annual recurring revenue (ARR) is a key metric for any business that relies on recurring revenue streams, such as subscription-based services or software-as-a-service (SaaS) companies. It represents the amount of revenue that a company can expect to generate from its recurring customers in a year, after accounting for any discounts, refunds, or cancellations.

Net ARR is an important metric because it provides a clear picture of a company's financial performance and growth potential. By tracking net ARR over time, businesses can identify trends and make informed decisions about their pricing, marketing, and customer retention strategies.

When Is It Valuable To Calculate Net ARR?

Calculating net annual recurring revenue (ARR) is valuable for any business that relies on recurring revenue streams, such as subscription-based services or SaaS companies. It is particularly useful for businesses that want to track their financial performance and growth potential over time.

Net ARR is also valuable for businesses that want to make informed decisions about their pricing, marketing, and customer retention strategies. By tracking net ARR, businesses can identify trends and patterns in their customer behavior and adjust their strategies accordingly.

Overall, calculating net ARR is a valuable tool for any business that wants to stay competitive and grow its recurring revenue streams over time.

How Do You Calculate Net ARR in Zendesk Sell

Zendesk Sell itself isn’t naturally geared towards letting you calculate complex metrics like Net ARR. As an alternative, teams typically use products like Arithmix to import data from Zendesk Sell 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 Zendesk Sell, combine it with data from other systems, and create calculations like Net ARR.

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 ARR in Arithmix

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

Arithmix is designed to give you the power to build any calculations you want on top of your Zendesk Sell 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.