Net Revenue Retention (NRR)
What Is Net Revenue Retention?
Net Revenue Retention (NRR) is a core metric that shows how much recurring revenue you retain from your existing customer base over a specific time period—after accounting for upgrades, downgrades, and churn. Unlike gross retention, which only measures what you didn’t lose, NRR also reflects how much your existing customers grew.
In practical terms, NRR answers this: if you didn’t acquire a single new customer this month or quarter, how much of your recurring revenue would still be there?
For SaaS companies, especially those with usage-based or tiered pricing models, NRR is a more dynamic indicator of customer health than logo retention alone. It captures both customer satisfaction (are they staying?) and customer success (are they expanding?).
When NRR is above 100%, it means your expansion revenue from existing customers (via upsells, cross-sells, and seat growth) outpaces any losses from churn or contraction. That’s a powerful signal that your customers aren’t just satisfied—they’re finding increasing value in your product.
Ultimately, NRR blends revenue performance and customer experience into one metric. It reflects not just how well you retain customers, but how effectively you grow with them.
Why NRR Matters in SaaS CX
In a B2B SaaS environment, NRR is more than a finance metric—it’s a lens into product experience, customer health, and post-sale value creation.
Here’s why NRR is essential for CX and retention teams:
Retention + Expansion in One View: NRR combines customer stickiness with account growth, helping teams understand what’s working across onboarding, adoption, and upsell motions.
Churn Detection: A declining NRR often signals that support issues, low product adoption, or UX friction are driving downgrades or cancellations—even if CSAT or NPS look healthy.
Predictable, Scalable Growth: A company with 110%+ NRR can grow without high CAC, because existing customers keep spending more over time.
Customer-Driven Strategy: High NRR companies often align support, CX, and product to deeply understand user goals, eliminate friction, and drive expansion based on real-world use cases.
How to Measure NRR
Measuring NRR requires clean revenue and customer segmentation data. Here’s the standard method:
Step-by-Step
- Start with Beginning MRR or ARR Total recurring revenue from existing customers at the start of the period.
- Subtract Churn and Contraction Remove lost revenue from customers who downgraded or churned.
- Add Expansion Revenue Include upsells, cross-sells, usage-based increases, or added seats from existing customers.
- Apply the Formula
Formula:
NRR (%) = ((Starting MRR – Churn + Expansion) ÷ Starting MRR) × 100
Example
Starting ARR: $1,000,000
Churned ARR: $50,000
Expansion ARR: $150,000
NRR = ((1,000,000 – 50,000 + 150,000) ÷ 1,000,000) × 100 = 110%
Tips for Accurate NRR Tracking
- Use cohort analysis to compare segments over time (e.g., by industry, plan, or region)
- Track monthly, but assess quarterly for stronger trend signals
- Separate out high-touch vs. self-serve customers to isolate expansion drivers
NRR is where revenue growth and customer experience intersect. It doesn’t just tell you how much you’re keeping—it reveals whether your CX, support, and product teams are helping customers unlock long-term value.
For growth-stage SaaS companies, improving NRR is one of the fastest ways to drive efficient growth. It’s a signal that your customers are finding enough value to stay—and to pay more.
If your NRR is under 100%, your business is shrinking from within. If it’s above 120%, your base is doing the growth for you.