Net Revenue Retention (NRR)
Revenue kept and expanded from existing customers.
Overview
NRR captures the durability and expansion of revenue from the existing customer base. It isolates the core health of cohorts without the noise of new sales.
NRR is the share of revenue retained and expanded from the existing customer cohort over a period.
Definition
Break NRR into expansion, contraction, and churn. Sustained >100% signals a product that increases in value over time and a motion that nurtures adoption and upsell.
Net Revenue Retention measures how revenue from your existing customer cohort changes over a period after accounting for expansion, contraction, and churn. It excludes new logo sales. Strong NRR (>100%) signals healthy upsell and cross‑sell dynamics and a product that continues to deliver growing value. Report NRR alongside gross revenue retention to show both overall durability and expansion performance.
Formula
Include expansion, contraction, and churn from existing cohort.
Anchor to start‑of‑period MRR for the existing cohort and adjust by expansion, contraction, and churn.
NRR = (MRR start + expansion − contraction − churn) / MRR start × 100%
Example
Start $100k, +$15k expansion, −$5k contraction, −$8k churn → 102%.
Show the math using a start baseline; avoid end‑of‑period counts which can hide losses with big expansions.
Common pitfalls
Including new logo revenue or mixing start and end baselines will produce misleading NRR.
- Including new logo revenue
- Using end‑of‑period counts instead of start baselines
- Ignoring downgrades/contraction
- Confusing logo churn with revenue churn
Benchmarks
SMB: 90–105%; mid‑market: 100–115%; enterprise: 110–130%+.
Healthy NRR ranges by segment. Focus on sustaining >100% and the drivers behind it.
Notes
Report logo churn separately and pair NRR with GRR to show both durability and expansion.
- Anchor to start‑of‑period cohort
- Report GRR alongside NRR for context
Related terms
NRR sits alongside MRR and ARR to describe scale, and complements churn and retention metrics.
FAQs
Common questions address whether to include new sales, how to treat downgrades, and anchoring baselines.
Include new sales?
Exclude new logos. Only existing cohort.