Net Revenue Retention (NRR)
Short answer
Net Revenue Retention (NRR) above 100% means your existing book of customers grows on its own — expansion outpaces churn and downgrades. It is widely considered the single most predictive metric of SaaS company quality.
Formula
NRR = (Starting MRR + Expansion − Downgrade − Churn) / Starting MRR
Take the recurring revenue you started the period with. Add any expansion (upgrades, more seats), subtract downgrades and churn. Divide by the starting revenue.
Why it matters
NRR above 100% means your existing book of customers grows on its own — without new sales spend. It is widely considered the single most predictive metric for SaaS company quality, because expansion revenue compounds at zero acquisition cost. Sub-90% NRR creates a leaky bucket that acquisition spending alone cannot outrun for long.
Benchmarks
People also ask
Common questions about Net Revenue Retention (NRR)
What is Net Revenue Retention (NRR)?+
Net Revenue Retention (NRR) measures how much of last year's revenue from existing customers you kept — including expansion, downgrades, and churn — without counting any new customers won.
How is Net Revenue Retention (NRR) calculated?+
Take the recurring revenue you started the period with. Add any expansion (upgrades, more seats), subtract downgrades and churn. Divide by the starting revenue.
What is a good Net Revenue Retention (NRR)?+
A healthy net revenue retention (nrr) is typically around > 120% — best-in-class. Specific targets vary by industry and stage; check our benchmarks above for your sector.
Why does Net Revenue Retention (NRR) matter?+
NRR above 100% means your existing book of customers grows on its own — without new sales spend. It is widely considered the single most predictive metric for SaaS company quality, because expansion revenue compounds at zero acquisition cost.
See your business's net revenue retention (nrr).
Paste your numbers and CFO Grade computes this — plus 23 other ratios — in seconds, with your industry's benchmark already loaded.
Related concepts
Where this matters most
See Net Revenue Retention (NRR) in the context of saas & software.
Industry-specific benchmarks, common pitfalls, and what lenders look for in this sector.