Net Revenue Retention (NRR)
A metric measuring revenue retained from existing customers including expansion and contraction.
Net Revenue Retention (NRR) measures the percentage of recurring revenue retained from existing customers over a period, accounting for all changes.
**NRR Calculation:**
(Starting MRR + Expansion - Contraction - Churn) ÷ Starting MRR × 100
**NRR Benchmarks:**
• Below 100%: Losing revenue (churn exceeds expansion) • 100-110%: Healthy retention • 110-120%: Strong expansion motion • 120%+: Best-in-class (top SaaS companies)
**NRR Components:**
• **Expansion**: Upsells, cross-sells, usage growth • **Contraction**: Downgrades, reduced usage • **Churn**: Customer cancellations
**Why NRR Matters:**
• Indicates product-market fit • Shows customer success effectiveness • Predicts long-term growth • Valued highly by investors • More efficient than new acquisition
**Improving NRR:**
• Invest in customer success • Build expansion playbooks • Create upsell triggers • Reduce friction in upgrades • Proactively prevent churn
Related Terms
Churn Rate
The percentage of customers or revenue lost over a given time period.
Expansion Revenue
Additional revenue generated from existing customers through upsells, cross-sells, and increased usage.
Customer Lifetime Value (CLV)
The total revenue a business can expect from a single customer account throughout their relationship.