Net Revenue Retention (NRR): The Metric SaaS Companies Live or Die By
What is Net Revenue Retention (NRR)?
Net Revenue Retention (NRR) is a key SaaS metric that shows how much recurring revenue you retain — including expansions, downgrades, and churn — from your existing customer base over a given period. It's a reflection of both your product’s value and your success in growing accounts. If your NRR is over 100%, it means your existing customers are spending more over time.
Why is Net Revenue Retention so important?
Why do investors love NRR?
NRR is a key health indicator for SaaS businesses. Unlike gross retention, NRR includes expansions (upgrades, additional seats, usage-based growth), which means it directly reflects how well your team turns users into long-term revenue. Top-performing SaaS companies often report NRR above 120%. According to OpenView's SaaS Benchmarks, best-in-class PLG companies hit 130%+ NRR.
How do you calculate NRR?
The formula for Net Revenue Retention is:
💡****Net Revenue Retention (NRR) ****= (Starting MRR + Expansion MRR − Churned MRR) ÷ Starting MRR
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