What is the net revenue retention formula?
The net revenue retention formula for SaaS is NRR = ((Starting MRR + Expansion - Contraction - Churn) / Starting MRR) × 100. Above 100% means existing customers grew. Exclude new logos. GRR drops expansion from that math.
Use one period (month or quarter) and the same customer set the whole way through.
Net revenue retention (NRR)
NRR = ((Starting MRR + Expansion - Contraction - Churn) / Starting MRR) × 100
Gross revenue retention (GRR)
GRR = ((Starting MRR - Contraction - Churn) / Starting MRR) × 100
Example: $100K starting MRR + $12K expansion - $3K contraction - $5K churn = $104K. NRR is 104%. GRR on the same numbers is 92%. Expansion is covering an 8% gross loss.
| NRR Range | Classification | What It Means | Typical Profile |
|---|---|---|---|
| 130%+ | World-class | Strong expansion revenue far exceeds churn | PLG with viral adoption |
| 110-130% | Excellent | Expansion revenue exceeds churn | Strong upsell/cross-sell motion |
| 100-110% | Good | Barely growing from existing customer base | Moderate expansion, low churn |
| 90-100% | Concerning | Shrinking revenue from existing customers | Churn exceeding expansion |
| <90% | Critical | Significant churn problem, losing revenue fast | High churn, minimal expansion |
A company at 102% and falling still needs attention. Health scores flag fading usage before downgrades and cancellations hit MRR. For the save plays, see how to reduce SaaS churn. For the receipt after a save, see saved revenue.
Frequently asked questions
What is a good NRR for SaaS?
Above 100% is the baseline: your existing customers are net growing. Strong SaaS companies often land at 110-130%. Below 90% usually signals a serious retention problem.
What is the difference between NRR and GRR?
NRR includes expansion revenue. GRR does not. GRR asks how much revenue you kept without any upsells. NRR asks whether the base grew or shrank overall. GRR is always 100% or below; NRR can exceed 100%.
Can NRR be above 100%?
Yes. If you start with $100K MRR, lose $5K to churn and $3K to contraction, but gain $12K from expansion, you end at $104K. NRR is 104%. Your existing base grew before any new sales.