What Is NRR (Net Revenue Retention)?
The percentage of recurring revenue retained from existing customers, including expansion and contraction.
The percentage of recurring revenue retained from existing customers, including expansion and contraction.
Net Revenue Retention (NRR) measures how much revenue you retain from your existing customer base over a period, factoring in upgrades, downgrades, and churn. An NRR above 100% means your existing customers are spending more over time.
NRR is one of the most important SaaS metrics because it shows whether your product naturally drives expansion. Top SaaS companies achieve NRR of 120-140%, meaning their revenue base grows even without new customers.
NRR directly impacts your growth efficiency — higher NRR means you need fewer new customers to hit revenue targets, reducing pressure on sales and marketing.
Formula
NRR = ((Starting MRR + Expansion - Contraction - Churn) ÷ Starting MRR) × 100
Example
Starting MRR $100K, +$15K expansion, -$3K contraction, -$5K churn = NRR of 107%.
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