ARR roll-forward
Opening, new, expansion, churn, closing.
By Surojit Chakraverti, founder of L3VLUP and an investor running a long-short healthcare and technology equities strategy.
On this subject: arr roll-forward.Updated 30 September 2026
Part of technology company financial models, with the models, labs and guides around it.
What it does
The stock that a subscription business is measured on, moved by three flows on the opening balance: new ARR from the sales force, expansion from existing customers, churn out of the base. Every quarter’s closing is the next quarter’s opening, net new ARR is the movement, and the customer count rolls beside it so ARR per customer can be read. Revenue and every retention metric are derived from this sheet.
Where it lives
The same schedule in each model that carries it, with the rows to open. Open a model in the browser, go to the sheet, and click the lines.
- Assumptions, rows 9–12: Opening ARR, Opening customers, Opening deferred revenue, Opening productive account executives (AEs)
- Assumptions, rows 25–29: ARR churn, quarterly, plan, Expansion, quarterly, plan, ARR churn, quarterly, downturn, Expansion, quarterly, downturn…
- ARR Build, rows 6–14: Opening ARR, New ARR, Expansion ARR, Churned ARR…
- ARR Build, rows 17–21: Opening customers, New customers, Churned customers, Closing customers…
What a reviewer looks for
- Churn and expansion applied to closing ARR.
- Expansion netted against churn, which hides gross retention.
- ARR quoted as revenue.
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