A measure of revenue retained from an existing customer base over a period, accounting for expansion, contraction, and churn. An NRR above 100% means the existing customer base is growing without any new customers.
Also known as:
NRR, net dollar retention, NDR, net revenue retention rate
Net Revenue Retention (NRR) measures how much of the revenue from existing customers at the start of a period is retained at the end, including the effect of expansion (upsell, cross-sell), contraction (downgrade), and churn (cancellation). It is expressed as a percentage of the starting revenue base.
An NRR above 100% means the existing customer base is growing — expansion revenue more than compensates for any churn. An NRR below 100% means the business is losing ground in its existing accounts and must rely on new customer acquisition simply to maintain revenue.
NRR = (Starting MRR + Expansion MRR − Contraction MRR − Churned MRR) ÷ Starting MRR × 100
Apply the same formula to quarterly or annual revenue. The starting base is always the revenue from existing customers at the beginning of the period only.
In B2B SaaS, NRR above 120% is considered elite. 100–110% is healthy for most mid-market SaaS businesses. Below 100% signals that even a strong new business motion will struggle to produce net growth. Series A and B investors routinely use NRR as a primary signal of commercial health and product-market fit.
A declining NRR typically signals one of three problems: the customer is not achieving the outcomes they expected (a product or onboarding problem), the commercial relationship is not being actively managed (a customer success problem), or the market is changing (a positioning or retention strategy problem). Tracking NRR by cohort, segment, and customer success owner reveals which of the three is driving the number — and which response will actually fix it.
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