Glossary · Business

Net Revenue Retention

The percentage of recurring revenue retained from existing customers including expansions, contractions, and churn.

Net Revenue Retention (NRR), also called Net Dollar Retention (NDR), measures the percentage of revenue retained from existing customers over a given period, accounting for upgrades (expansion), downgrades (contraction), and cancellations (churn). It is calculated as: NRR = (Starting MRR + Expansion - Contraction - Churn) / Starting MRR × 100. An NRR above 100% means the company is growing revenue from existing customers even without acquiring new ones. Top-performing SaaS companies achieve 120-140% NRR. NRR is one of the most important metrics for investors because it demonstrates product stickiness, upsell effectiveness, and long-term growth potential independent of new customer acquisition.

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