What Is GRR (Gross Revenue Retention)?

How to Calculate Gross Revenue Retention

GRR is calculated by taking starting recurring revenue, subtracting contraction (downgrades) and churn, then dividing by starting revenue. Expansion revenue is deliberately excluded.

GRR = (Starting MRR - Contraction - Churn) / Starting MRR × 100

GRR can never exceed 100% — unlike NRR, there's no expansion to push it higher. A GRR of 100% would mean zero downgrades and zero churn, which almost never happens in practice.

Why GRR Matters More Than NRR Alone

NRR can look healthy while masking a serious churn problem. A company losing 20% of revenue annually to churn but growing 25% from upsells reports 105% NRR — looks fine. But GRR reveals the 80% retention rate underneath, which means the company's revenue base is eroding fast.

Investors and acquirers pay close attention to GRR because it measures the durability of the revenue base. High NRR with low GRR suggests the company depends on a small number of expanding accounts to offset widespread churn — a fragile position.

GRR Benchmarks by Segment

Enterprise SaaS companies typically report GRR between 90-95%, reflecting long contracts and high switching costs. Mid-market SaaS runs 85-92%. SMB-focused products see 75-85% GRR, driven by higher churn rates among smaller customers.

GRR below 80% signals a product-market fit issue. At that rate, the company must replace more than 20% of its revenue base every year just to stay flat — a treadmill that becomes unsustainable as ARR grows.