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What is Net Revenue Retention?

Measuring Success: Net Revenue Retention

Net Revenue Retention, or NRR, is a revenue-focused metric that measures the percentage of recurring revenue retained from existing customers over a specific period.

It reflects the health and growth potential of a subscription or recurring revenue business.

NRR calculates how much revenue from an existing customer base is retained after accounting for upgrades, downgrades, and cancellations.

Monthly Recurring Revenue - MRR

Expansion MRR

Additional revenue from upsells or upgrades

Contraction MRR

Revenue lost from downgrades

Churned MRR

Revenue lost from cancellations

What is NRR?

Revenue Centric

Focuses on revenue changes, not just user counts.

Growth Indicator

NRR indicates revenue growth from the existing customer base.

Comprehensive

Accounts for customer churn, downsells, and upsells.

Subscription Specific

Used in SaaS and recurring revenue models.

How are Net Revenue Retention Metrics Used?

Business Health

Assess the ability to grow revenue without acquiring new customers.

Investor Reporting

Demonstrate recurring revenue stability and growth.

Customer Success

Identify opportunities for expansion.

Financial Forecasting

Model future revenue streams and growth scenarios.

How is NRR Collected?

• Subscription billing data capturing MRR changes
• Customer account management systems tracking upgrades/downgrades
• Analytics tools specialized in recurring revenue metrics

Net Revenue Retention is a critical success metric for understanding growth and revenue sustainability in subscription SaaS businesses.

What is the Formula for NRR?