NRR
Net Revenue Retention
How much revenue you keep (and grow) from existing customers, after accounting for churn, downgrades, and expansion. Above 100% means your customer base is growing without adding a single new logo. Investors obsess over this one.
You start the year with $1M ARR from existing customers. By year end: $150k in expansion, $80k churned, $20k in downgrades. NRR = ($1M + $150k - $80k - $20k) ÷ $1M = 105%. Your existing base grew 5% without any new sales. At 105% compounded, your base doubles in ~14 years with zero new logos.
NRR is the metric that separates good SaaS from great SaaS. At 100%, you're treading water. Every churned dollar has to be replaced by expansion just to stay flat. Below 100%, you're on a treadmill that gets faster every month.
The magic happens above 100%. At 110% NRR, your existing customers grow 10% annually without you lifting a finger on acquisition. At 120%+, you're in elite territory. Snowflake, Datadog, Twilio all reported 120%+ NRR at scale.
The catch: NRR hides logo churn. You can have 120% NRR while losing 20% of customers if the survivors expand enough. That's why investors look at GRR (gross retention) too, to see how much you'd keep if nobody expanded.
Define ItOther Definitions
“The percentage of recurring revenue retained from existing customers over a period, including expansion revenue and subtracting churn and contractions. Explicitly excludes new customer revenue.”
“Beginning MRR plus Expansion MRR minus Churned MRR minus Contraction MRR, divided by Beginning MRR. Measures how the existing customer base's revenue changes over time.”
“A core SaaS metric showing revenue retention and expansion from existing customers, used by investors to assess product-market fit, pricing power, and unit economics quality.”
“Net revenue retention benchmarked by segment: SMB-focused SaaS targets 90%+, while enterprise-focused SaaS targets 110%+ annually. Elite performers achieve 120%+.”
The formula: (Starting MRR + Expansion - Churn - Contraction) ÷ Starting MRR × 100. The key word is "existing." New customers are excluded entirely.
Stripe and ChurnZero focus on the mechanical calculation. The Growth Equity Interview Guide explains why investors care: NRR directly indicates product-market fit and pricing power. SaaS CEO provides the benchmarks: 90%+ for SMB, 110%+ for enterprise, 120%+ for elite.
The difference from GRR (Gross Revenue Retention): GRR excludes expansion. It only measures how much you'd keep if nobody upgraded. GRR shows your floor (pure retention), NRR shows your ceiling (retention + growth). Investors want both high, but NRR above 100% is the real signal.
MistakesCommon Mistakes
Including new customer revenue (NRR is existing customers only)
Confusing NRR with GRR (GRR excludes expansion revenue)
Calculating monthly but reporting as if it were annual
Not segmenting by cohort or customer type (hides where problems are)
Celebrating high NRR while ignoring high logo churn hidden underneath
NRR under 100%? Your existing base is shrinking.
We find where expansion opportunities are being missed and where churn signals are being ignored. The fix is usually in the handoffs.
Experience across
