Net Revenue Retention(NRR)
Recurring revenue from existing customers, including expansion and churn.
Net Revenue Retention measures revenue from an existing customer cohort over time, accounting for expansion (upsells, cross-sells, usage growth) and contraction (downgrades, churn). NRR above 100% means existing customers contribute more revenue over time even without acquiring new ones — the gold standard for SaaS.
Best-in-class SaaS companies achieve 130%+ NRR. Healthy SaaS runs 110-130%. Below 100% indicates the business has a retention problem that growth from new sales must mask.
NRR = (Starting MRR + Expansion - Contraction - Churn) / Starting MRR × 100Start year with $1M MRR from a cohort. End year: $200K expansion, $50K contraction, $30K churn. NRR = ($1M + $200K - $50K - $30K) / $1M = 112%.
Related terms
The normalized monthly value of all recurring revenue contracts.
MRR multiplied by 12 — the normalized annual value of recurring revenue.
The percentage of customers who cancel in a given period.
The percentage of customers (or revenue) retained over a period — the inverse of churn.
Need help applying Net Revenue Retention to your business?
Book a free 30-minute strategy call. I'll show you how Net Revenue Retention fits into a real growth strategy for your business.
Book a free strategy call