Net Revenue Retention (NRR)

Net Revenue Retention (NRR) measures how much recurring revenue you keep and grow from an existing set of customers over a period, without counting anyone new. It captures the full picture of an existing cohort: upgrades and usage growth push it up, while downgrades and cancellations pull it down. NRR above 100% means your current customers are worth more today than a year ago, even before you add a single new logo.

How to calculate NRR

Start with the recurring revenue of a cohort at the beginning of the period, then adjust for what happened to that same cohort.

Take a cohort at $100,000 in MRR. Over the year they add $25,000 in expansion, lose $8,000 to contraction, and $5,000 to churn. NRR is ($100,000 + $25,000 − $8,000 − $5,000) ÷ $100,000 = 112%. New customers are deliberately excluded so the metric isolates how the base itself is trending.

Why NRR matters

• Growth without acquisition — NRR above 100% means the business grows even if sales stops entirely. That compounding is why investors prize it.
• Product-market fit signal — customers who expand rather than shrink are voting with their wallets.
• Benchmarks — many strong B2B SaaS companies target 110%+, with best-in-class well above that.

NRR vs GRR

NRR lets expansion offset losses, which can hide churn behind a few big upgrades. Gross revenue retention strips expansion out to show pure leakage, and it can never exceed 100%. Read the two together: a high NRR paired with a weak GRR means growth is masking a retention problem you should fix.