Net Revenue Retention
Net Revenue Retention (NRR)
Revenue
The percentage of recurring revenue retained from existing customers over a period, including expansion, contraction, and churn. NRR above 100% indicates growth from existing customers.
What is Net Revenue Retention?
Net Revenue Retention (NRR), also called Net Dollar Retention, measures how much revenue you retain from existing customers over time, accounting for upgrades, downgrades, and churn.
Why NRR above 100% is powerful:
- It means existing customers are growing faster than they're churning
- You can grow revenue even without acquiring new customers
- It indicates strong product-market fit and customer satisfaction
Benchmarks:
- Below 100%: Revenue shrinking from existing base
- 100-110%: Good retention with modest expansion
- 110-120%: Strong expansion revenue
- Above 120%: Exceptional (typical of best SaaS companies)
Formula
NRR = (Starting MRR + Expansion - Contraction - Churned MRR) ÷ Starting MRR × 100
Example
Start with $100K MRR, add $20K expansion, lose $10K to churn, $5K contraction. NRR = 105%.
Why Net Revenue Retention Matters
NRR above 100% means you can grow revenue from existing customers alone—the holy grail of subscription businesses.
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