Net revenue retention (NRR) is the percentage of recurring revenue retained from existing customers over a period, including expansion and after subtracting downgrades and churn. Above 100 percent means the base grows without new customers.
Net revenue retention is the single number that tells you whether your existing customers are worth more or less over time. It measures the recurring revenue you keep from the customers you already had, counting upgrades and subtracting downgrades and cancellations. Above 100 percent, the base grows on its own; below, it shrinks.
How Net revenue retention (NRR) works
NRR takes the recurring revenue from a cohort of existing customers at the start of a period, adds expansion (upgrades, seat and usage growth), subtracts contraction (downgrades) and churn, and divides by the starting revenue. New customers are excluded; NRR is purely about the existing base.
NRR = (starting MRR + expansion − contraction − churn) ÷ starting MRR
Starting at $100,000 MRR, gaining $15,000 expansion, losing $5,000 to downgrades and $4,000 to churn gives $106,000, an NRR of 106 percent. The base grew 6 percent without a single new customer.
Net revenue retention (NRR) examples
A usage-based product often posts high NRR because customers naturally consume more over time; expansion outpaces churn. A flat-subscription product with little upsell may sit near or below 100 percent, relying on new logos to grow.
NRR above 100 percent is the hallmark of strong product-led and usage-based businesses: growth compounds from the installed base before any new sales.
Net revenue retention (NRR) vs Gross revenue retention
| Net revenue retention | Gross revenue retention | |
|---|---|---|
| Includes expansion | Yes | No |
| Can exceed 100% | Yes | No (capped at 100%) |
| Measures | Net growth of the base | Pure retention floor |
| Best for | Growth quality | Churn severity |
Benefits & when to use it
NRR is one of the most watched SaaS metrics because it captures the quality of the revenue base in a single figure. High NRR means the business grows even if it stops acquiring, which is why investors prize it. Pairing NRR with GRR separates “we expand a lot” from “we barely churn.”
It is especially favorable for usage-based and hybrid products, where consumption tends to rise with customer success. For the churn side of the equation, see SaaS churn rate.
FAQ
How do you calculate net revenue retention?
Take starting recurring revenue from existing customers, add expansion, subtract contraction and churn, then divide by the starting revenue. Exclude new customers. Above 100 percent means the existing base grew on its own.
What is a good NRR?
Benchmarks vary, but best-in-class SaaS often exceeds 120 percent, solid businesses sit around 100 to 110 percent, and below 100 percent means the base is shrinking. Usage-based products tend to post higher NRR.
What is the difference between NRR and GRR?
NRR includes expansion and can exceed 100 percent; gross revenue retention (GRR) excludes expansion and is capped at 100 percent, showing the pure retention floor. Comparing them shows how much growth comes from expansion versus low churn.
How Credyt handles Net revenue retention (NRR)
Usage-based expansion is what drives high NRR, and Credyt measures it directly. Because every usage event is metered and attributed per customer in real time, the expansion (and contraction) that NRR depends on is captured as it happens, giving finance accurate, current inputs rather than figures reconstructed from monthly invoices. Explore Credyt →