NRR (Net Revenue Retention)
NRR definition for SaaS and AI founders: what it means, how to calculate it, and common pitfalls when reading it in dashboards.
Net revenue retention measures how much recurring revenue you keep from customers you already had at the start of a period, counting upgrades, downgrades and cancellations.
Formula
NRR % = (Starting MRR + Expansion − Contraction − Churn) ÷ Starting MRR × 100
In practice
New customers are excluded. NRR above 100% means existing customers grow revenue on their own.
Related terms
Related
- ARPAAverage MRR per paying customer.
- ARRAnnualized recurring revenue: MRR multiplied by twelve.
- CACSales and marketing spend per new customer.
- ChurnCustomers or recurring revenue lost in a period.
- COGSThe direct cost of delivering your product to existing customers.
- Contribution marginRevenue minus all variable costs, including variable sales costs.
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