Net Revenue Retention (NRR)
NRR measures how recurring revenue from existing customers changes over a period. It counts upgrades, downgrades, and cancellations, but no new customers.
Updated October 1, 2026
Net revenue retention (NRR) measures how recurring revenue from an existing group of customers changes over a period. New customers don't count. Upgrades and usage growth raise it. Downgrades and cancellations lower it. NRR above 100% means those customers pay you more now than at the start of the period.
How to calculate NRR
NRR = (starting MRR + expansion − contraction − churn) ÷ starting MRR
A cohort starts the year at $100,000 in MRR. It adds $25,000 in expansion, loses $8,000 to contraction, and loses $5,000 to churn. NRR is ($100,000 + $25,000 − $8,000 − $5,000) ÷ $100,000 = 112%.
Why NRR matters
- With NRR above 100%, revenue grows even if you sign no new customers.
- Customers who spend more over time are getting value from the product.
- Many B2B SaaS companies aim for 110% or higher.
NRR vs GRR
In NRR, a few large upgrades can hide churn. Gross revenue retention leaves expansion out and can't exceed 100%. Read them together. High NRR with low GRR means upgrades are covering for customers you're losing.