Net Revenue Retention (NRR): Formula, Benchmarks and How to Improve It

Net revenue retention (NRR) measures how much recurring revenue you keep from your existing customers over a period, after churn and downgrades, and including upsells and expansion. It ignores new customers completely. An NRR of 110% means that, without signing a single new customer, your revenue from last year's customers grew by 10%. NRR is also called net dollar retention (NDR).

NRR is the one metric that shows both jobs of a customer success team at once: keeping revenue and growing it. That is why investors watch it closely, and why it is one of the strongest predictors of how fast a SaaS company grows.

How to calculate NRR

NRR = (starting recurring revenue + expansion − contraction − churn) ÷ starting recurring revenue × 100

• Starting recurring revenue: MRR or ARR from customers who existed at the start of the period.
• Expansion: upsells, cross-sells, added seats and price increases from those customers.
• Contraction: downgrades and seat reductions.
• Churn: revenue from customers who left.

Revenue from customers acquired during the period does not count.

Worked example. You start the year with $2,000,000 ARR from existing customers. During the year they expand by $300,000, downgrade by $80,000 and $140,000 churns. NRR = (2,000,000 + 300,000 − 80,000 − 140,000) ÷ 2,000,000 × 100 = 104%.

Use the same unit (MRR or ARR) throughout, and always measure a fixed starting group of customers.

NRR vs. GRR

Gross revenue retention (GRR) uses the same starting revenue but leaves expansion out: it shows how much revenue you keep, capped at 100%. In the example above, GRR = (2,000,000 − 80,000 − 140,000) ÷ 2,000,000 × 100 = 89%.

The two answer different questions. GRR tells you how well you keep what you have; NRR tells you whether the base grows. A high NRR can hide a weak GRR when a few large expansions cover many losses, so report both. Our guide to gross revenue retention goes deeper, including GRR vs NRR side by side.

What a good NRR looks like

NRR depends heavily on contract value, so compare yourself with companies at a similar price point. SaaS Capital's 2025 survey of more than 1,000 private B2B SaaS companies (excluding companies under $1M ARR) shows these medians (SaaS Capital, 2025):

Contract length matters too: multi-year contracts show a median NRR of 103%, annual contracts 101% and month-to-month 100% in the same survey.

Why NRR predicts growth

The same survey shows how strongly NRR and growth move together. Median growth rates by NRR band:

The reason is compounding. At 110% NRR, your existing customer revenue roughly doubles in about seven years without any new sales; at 100%, every bit of growth has to come from new customers.

Negative churn: when NRR goes above 100%

Negative churn means expansion from existing customers is larger than the revenue you lose to churn and downgrades. It is the same thing as NRR above 100%. Your customer base grows in value even if some customers leave.

A simple example: one customer upgrades from $1,000 to $1,300 a month, and a second customer paying $300 a month cancels. Revenue from the existing base stays flat. Once upgrades outweigh losses month after month, the base grows on its own.

Negative churn is not a reason to ignore lost customers. Expansion can mask a growing number of lost accounts, especially when a few large customers drive most of the growth. In our study of 44,000 SaaS users, the top 10% of customers held 58% of MRR on average, so a handful of accounts can swing NRR in either direction. Track logo churn next to NRR.

How to forecast NRR

A forecast built on NRR tells you how much growth to expect before a single new deal closes. A practical approach for a 6 to 12 month forecast:

1. Build a cohort triangle in dollars. Rows are customer cohorts by start month, columns are months since start, and each cell holds the revenue that cohort still generates. Rebuild it from billing events (upgrades, downgrades, cancellations), not from summary MRR snapshots, so every change is traceable.
2. Segment the cohorts by contract value, billing term and onboarding completion. They behave very differently.
3. Extrapolate each segment from its recent cohorts, then add the segments back together.
4. Add the renewals you already know about. Contracts up for renewal in the period, the ones at risk and the expansion conversations in progress move the forecast more than any curve.
5. Plan three scenarios: base, upside and downside, and say what has to happen for each.

Our guides to cohort analysis and renewal forecasting go into the mechanics.

How to improve NRR

NRR has two levers: lose less, and grow more from the customers you keep.

Lose less (raise GRR):

• Get every new account to first value in the first 90 days.
• Spot risk early: most churning customers show warning signs 30 or more days before they cancel. See churn prediction.
• Start renewals 120 days ahead with a clear owner. See the renewal management playbook.
• Treat every downgrade as a churn signal. See how to reduce churn.

Grow more (expansion):

• Know which accounts are ready to grow, from their own usage: seats close to the limit, new teams joining, adoption of advanced features.
• Time the upsell conversation to a success, not to your quarter end.
• Price so that growth in value leads to growth in revenue: seats, usage or modules.
• Make more than one person care about the product; accounts with a team expand and stay.

Our guide to expansion revenue and upselling covers the growth side in detail.

How Customerscore.io helps you raise NRR

Customerscore.io shows NRR with expansion and contraction broken down, and lets you drill into the cohorts that hold retention and the ones that drag it down. Every account gets two scores from 1 to 5, refreshed daily: a Churn Risk Score for accounts that may shrink or leave, and an Upsell Score for accounts ready to grow, each with the drivers and brakes behind it. When an account is flagged either way, a playbook creates the tasks for its CS manager or account manager, so both levers of NRR get worked every day. Most teams are live in 1 to 3 weeks.

To see how it works, book a demo.

Frequently asked questions

What is a good NRR for B2B SaaS?

It depends on contract value. In SaaS Capital's 2025 survey, median NRR ranges from 98% for contracts under $12k to 106% for contracts over $250k. Anything above 100% means your existing base grows without new sales.

Is NRR the same as net dollar retention?

Yes. Net revenue retention (NRR) and net dollar retention (NDR) are two names for the same metric.

Can NRR be above 100%?

Yes. When expansion from existing customers is larger than churn and contraction, NRR goes above 100%. This is also called negative churn. GRR cannot go above 100%.

Should NRR be measured monthly or annually?

Annually is the standard for reporting and benchmarks, because it smooths out seasonal swings and matches annual contracts. Monthly NRR is useful internally to spot changes early; do not annualize it by multiplying.

Does NRR include new customers?

No. NRR only covers customers who existed at the start of the period. New customers belong in growth metrics, not retention.

Key takeaways

• NRR measures revenue kept and grown from existing customers; GRR measures only revenue kept.
• Median NRR in B2B SaaS runs from 98% to 106% depending on contract value (SaaS Capital, 2025).
• NRR above 100% (negative churn) means the base grows without new sales, and higher NRR goes with much faster growth.
• Raise NRR with both levers: lose less (early risk, renewals, downgrades) and grow more (upsell readiness, timing, pricing).

Related: Gross revenue retention · Expansion revenue and upselling · Cohort analysis · Renewal forecasting