Net Revenue Retention (NRR)
The percentage of recurring revenue retained from existing customers after accounting for churn, downgrades, and expansion.
Why It Matters
NRR above 100% means you grow revenue even without acquiring new customers, which investors consider the strongest growth signal.
How It Works
Start with beginning-period revenue from existing customers, add expansion revenue (upsells, cross-sells), subtract contraction (downgrades) and churn, then divide by beginning revenue. An NRR of 120% means you grew existing customer revenue by 20%.
Real-World Example
A company starts with $1M ARR from existing customers, adds $300K in upsells, and loses $100K to churn, yielding 120% NRR.
Common Mistakes
Confusing gross retention with net retention metrics
Not separating expansion revenue from new customer revenue
Related Terms
The percentage of customers who stop using your product or cancel their subscription in a given period.
The predictable revenue a subscription business earns every month from active subscriptions.
The annualized value of recurring subscription revenue, calculated as MRR multiplied by 12.
Net Revenue Retention (NRR) FAQs
What is a good NRR?
Above 100% is good, 110-130% is excellent, and top SaaS companies like Snowflake and Twilio exceed 130%.
How is NRR different from gross retention?
Gross retention only measures churn and contraction (capped at 100%), while NRR includes expansion revenue and can exceed 100%.
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