What is NRR (Net Revenue Retention)?
Definition
NRR (Net Revenue Retention) measures the percentage of recurring revenue retained from existing customers over time, including expansions, upgrades, downgrades, and churn. NRR above 100% means expansion revenue exceeds lost revenue.
How to Calculate NRR
NRR = ((Starting MRR + Expansion - Churn - Contraction) / Starting MRR) × 100
Example:
Starting MRR: $100,000
Expansion: +$15,000
Churn: -$5,000
Contraction: -$2,000
NRR = ($108,000 / $100,000) × 100 = 108%
NRR Benchmarks
Below 90% - Poor retention, high churn
90-100% - Acceptable but losing revenue
100-110% - Good, negative net churn
Above 120% - World-class expansion