sales
Net Revenue Retention (NRR)
Revenue from existing customers a year later - including expansion, contraction, and churn.
Definition
Net Revenue Retention (NRR) measures how much revenue from existing customers grows or shrinks over a year, including upsell, cross-sell, contraction, and churn. Formula: (starting MRR + expansion - contraction - churn) / starting MRR. NRR above 100% means existing customers grow faster than they churn - the holy grail of recurring revenue businesses. Best-in-class SaaS runs 120-130% NRR. Below 100% means you're losing more from existing customers than you're gaining; growth has to come entirely from new acquisition.
In your business
- →Track NRR quarterly - it's the single best health metric for recurring revenue
- →NRR above 100% means you can grow without any net new customers
- →Build customer success and expansion motion to push NRR above 110%