Calculate Net Revenue Retention from beginning ARR, expansion, contraction, and churn. NRR above 100% means expansion from existing customers exceeds churn.
Revenue Retention Parameters
Enter beginning ARR and revenue changes (expansion, contraction, churn) to calculate Net Revenue Retention
Understanding the Inputs
Key components required for the Net Revenue Retention calculation
Beginning ARR
Annual Recurring Revenue from the existing customer cohort at the start of the period. Excludes any revenue from customers acquired after the period start.
Snapshot of ARR from cohort at period start
Same cohort tracked through the period
Typically monthly or quarterly comparison
Exclude new logo ARR for pure retention view
Expansion Revenue
Additional ARR from existing customers during the period: upsell, cross-sell, and price increases.
Upsell (higher tier or more seats)
Cross-sell (new products or modules)
Price increases and list-price changes
Usage-based expansion (consumption growth)
Contraction Revenue
ARR lost from existing customers who downgraded or reduced commitment but did not fully churn.
Plan downgrades (e.g. enterprise to team)
Seat or usage reductions
Partial cancellations (e.g. one product only)
Price concessions or discounts applied
Churn Revenue
ARR lost from existing customers who fully cancelled or did not renew during the period.
Full contract cancellation
Non-renewal at end of term
Bankruptcy or company closure
Report as ARR at time of churn (not remaining value)
Net Revenue Retention: Definition and Core Purpose
Net Revenue Retention (NRR), sometimes called Net Dollar Retention (NDR), measures how much revenue you retain and expand from an existing customer cohort over a period. It answers: "From the ARR we had at the start of the period from this cohort, how much do we have at the end—after expansion, contraction, and churn?" NRR is one of the most important SaaS metrics for investors and boards because it signals whether growth is durable and efficient.
Why NRR Excludes New Customers
NRR deliberately excludes revenue from new customers acquired during the period. It isolates the performance of your existing base: retention, expansion, and contraction. New logo ARR is tracked separately (e.g. in new ARR or pipeline). Combining NRR with new ARR gives total ARR growth.
A Measure of Product Stickiness and Land-and-Expand
High NRR indicates that existing customers are not only staying but spending more—through upsell, cross-sell, or price increases. It is a vital metric for investors, board reporting, and strategic planning because it signals sustainable growth from the current customer base.
The NRR Formula and Components
NRR is calculated by comparing ending ARR from the cohort to beginning ARR, where ending ARR reflects expansion (add) and contraction and churn (subtract).
Expansion is any increase in ARR from existing customers during the period:
Upsell: higher tier, more seats, or more usage.
Cross-sell: new products or modules.
Price increases: list-price or contract price changes.
Usage-based expansion: consumption growth within the same contract.
Defining Contraction and Churn
Contraction is ARR lost from downgrades or partial cancellations (customer still active). Churn is ARR lost from customers who fully cancelled or did not renew. Both are measured in ARR terms (e.g. the annualized value of the lost revenue at the time it was lost).
Interpreting NRR and Ideal Thresholds
NRR is expressed as a percentage. A result of 110% means that from the beginning cohort ARR, you ended the period with 110% of that amount from the same cohort—i.e. net expansion of 10%.
General Interpretation Guidelines
NRR = 100%: You retained all cohort revenue; expansion exactly offset contraction and churn. No net growth from existing customers.
NRR > 100%: Expansion from existing customers exceeds churn and contraction. Best-in-class SaaS often targets 110%+; above 120% is exceptional.
NRR < 100%: Net revenue loss from the cohort. Churn and contraction outweigh expansion. Focus on retention and expansion is critical.
The 110% Benchmark (Best-in-Class NRR)
Many top SaaS companies report NRR of 110% or higher. This indicates a strong land-and-expand motion: customers expand over time, reducing reliance on new acquisition for growth. Investors use NRR to assess product-market fit and the durability of revenue. Companies with NRR above 120% are often considered exceptional; those below 100% are losing net revenue from the existing cohort and should prioritize retention and expansion before scaling acquisition.
When NRR Is Low
NRR below 100% suggests that existing customers are contracting or churning faster than you are expanding. Before scaling acquisition, address churn drivers, onboarding, customer success, and pricing to improve NRR.
NRR vs. Gross Revenue Retention (GRR)
Gross Revenue Retention (GRR) measures retention only: it subtracts churn and contraction from beginning ARR but does not add expansion. So GRR is always ≤ 100%. NRR adds expansion revenue on top of the same base, which is why NRR can exceed 100% and is the preferred metric for growth-quality assessment.
The GRR Formula
GRR = (Beginning ARR - Contraction - Churn) / Beginning ARR × 100. It answers: "What share of cohort ARR did we retain?" NRR adds expansion on top, so NRR can exceed 100% when expansion outweighs churn and contraction. Use GRR when you want to focus purely on minimizing downgrades and churn; use NRR when you want the full picture including upsell and cross-sell.
When to Use Each
Use GRR to focus purely on retention (minimizing downgrades and churn). Use NRR to capture the full picture: retention plus expansion. Investors and boards typically emphasize NRR because it reflects both retention and land-and-expand success.
Role in Investor and Board Reporting
NRR is a standard metric in SaaS investor updates and board decks. It signals whether growth is coming from existing customers as well as new ones.
Valuation and Efficiency
High NRR reduces the need to acquire new customers to hit growth targets. It supports efficient growth and often correlates with stronger unit economics (e.g. LTV:CAC, payback). Investors may apply premium multiples to companies with best-in-class NRR.
Segment and Cohort Analysis
Calculate NRR by segment (e.g. SMB vs enterprise), product line, or cohort (e.g. by year of acquisition) to identify where retention and expansion are strongest and where to invest in customer success and product.
Conclusion
Net Revenue Retention is the core metric for measuring revenue retained and expanded from an existing customer cohort. It excludes new customer revenue and combines expansion with contraction and churn. A target of 110%+ is common for best-in-class SaaS; above 120% is exceptional; below 100% indicates net revenue loss from the cohort and should trigger a focus on retention and expansion before scaling acquisition.
Track NRR consistently by segment and cohort, report it alongside new ARR and CAC in investor and board materials, and use it to prioritize customer success, expansion playbooks, and churn reduction. When NRR is strong, growth is more efficient and sustainable.
Frequently Asked Questions
Common questions about Net Revenue Retention (NRR)
What is Net Revenue Retention (NRR)?
NRR measures how much revenue you retain and expand from an existing customer cohort over a period. It is (Ending ARR / Beginning ARR) × 100, where Ending ARR = Beginning ARR + Expansion - Contraction - Churn. It excludes new customer revenue and isolates the performance of your existing base.
What is a good NRR?
Best-in-class SaaS often targets 110%+ NRR. Above 120% is exceptional. NRR of 100% means you retained all revenue from the cohort (expansion offset churn and contraction). Below 100% means net revenue loss from existing customers and should trigger focus on retention and expansion.
What is the difference between NRR and GRR?
Gross Revenue Retention (GRR) only subtracts churn and contraction from beginning ARR; it does not add expansion. So GRR is always ≤ 100%. NRR adds expansion, so NRR can exceed 100% when expansion outweighs churn and contraction. Use GRR for pure retention; use NRR for retention plus expansion.
Why does NRR matter to investors?
High NRR indicates strong product-market fit, land-and-expand motion, and that growth can come from existing customers as well as new sales. It reduces reliance on new acquisition and supports efficient growth. Investors often use NRR to assess the durability and quality of revenue.
How do I improve NRR?
Focus on expansion (upsell, cross-sell, price increases), reducing churn (onboarding, success, product fit), and minimizing contraction (downgrades, seat reductions). Customer success, usage-based expansion, and packaging play key roles. Segment NRR by cohort and product to find improvement levers.
What period should I use for NRR?
NRR is typically calculated monthly or quarterly. Use a consistent period (e.g. trailing 12 months or quarter-over-quarter) and align beginning ARR and ending ARR to the same cohort definition so expansion, contraction, and churn are measured correctly.
Should expansion include price increases?
Yes. Expansion revenue includes upsell, cross-sell, and price increases (list-price or contract price) from existing customers. Some companies report NRR with and without price increases to separate organic expansion from pricing. Be consistent in definition for comparability.
How do I handle multi-year contracts?
ARR is typically recognized as the annualized value of the contract (total contract value / years). Churn is the ARR lost when a customer cancels or does not renew. Contraction is ARR lost from downgrades or partial cancellations. Use the same ARR definition for beginning and ending ARR.
Can NRR be calculated by segment?
Yes. Calculate NRR by segment (e.g. SMB vs enterprise), product line, or cohort (e.g. by year of acquisition) to identify where retention and expansion are strongest and where to invest in customer success, product, or pricing.
What if my NRR is below 100%?
NRR below 100% means churn and contraction from the cohort exceed expansion. Before scaling acquisition, address churn drivers (onboarding, success, product fit), reduce contraction (packaging, pricing), and invest in expansion (upsell, cross-sell). Improving NRR often has a larger impact on growth than adding new customers at high CAC.
Usage of this Calculator
Practical applications and real-world context
Who Should Use This Calculator?
SaaS Founders & CFOsTo track retention and expansion from existing customers and report NRR to the board and investors.
Revenue & Customer Success LeadersTo set targets for expansion and churn and measure the impact of upsell, cross-sell, and retention initiatives.
Investors & AnalystsTo assess product stickiness and growth quality and compare portfolio companies to best-in-class benchmarks (110%+).
Board MembersTo monitor retention and expansion metrics and make informed decisions on where to invest in product and customer success.
Limitations & Accuracy Considerations
Cohort definition: Beginning ARR must be from a clearly defined cohort (e.g. all customers as of period start). New customers acquired during the period are excluded from NRR.
Expansion vs. new: Ensure expansion revenue is only from existing cohort customers (upsell, cross-sell, price increases). Revenue from new logos should not be included.
Seasonal and one-time effects: Large one-time churn or expansion can skew a single period. Use trailing or annual NRR for smoother trends.
Real-World Examples
Case A: Best-in-Class SaaS (120%+ NRR)
A B2B SaaS with strong land-and-expand sees 120% NRR: expansion from upsell and cross-sell far outweighs churn and contraction. Growth from existing customers reduces reliance on new acquisition and supports efficient scaling. Investors value this highly.
Case B: Early-Stage with High Churn (85% NRR)
An early-stage company with 85% NRR is losing net revenue from the existing cohort. Before scaling sales, they focus on onboarding, customer success, and product fit to reduce churn and increase expansion. Improving NRR to 100%+ often has a larger impact on growth than adding new customers at high CAC.
Summary
The SaaS Net Revenue Retention (NRR) Calculator computes NRR from beginning ARR, expansion, contraction, and churn. NRR above 100% means expansion from existing customers exceeds churn and contraction; target 110%+ for best-in-class performance.
NRR excludes new customer revenue and is a core metric for investors and boards. Pair NRR with new ARR and CAC for a complete view of SaaS unit economics and growth.
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Calculate Net Revenue Retention from beginning ARR, expansion, contraction, and churn. NRR above 100% means expansion from existing customers exceeds churn.
How to use SaaS Net Revenue Retention (NRR) Calculator
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Frequently asked questions
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