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What Is NRR (Net Revenue Retention)?

NRR (Net Revenue Retention) is a SaaS metric that measures the percentage of recurring revenue retained from existing customers over a given period, including the effects of upgrades, downgrades, and churn. An NRR above 100% means a company is growing revenue from its existing customer base even without acquiring new customers.

How to Calculate Net Revenue Retention

NRR is calculated by taking the starting recurring revenue from a cohort of customers, adding expansion revenue (upgrades, cross-sells), subtracting contraction revenue (downgrades) and churned revenue, then dividing by the starting revenue.

NRR = (Starting MRR + Expansion - Contraction - Churn) / Starting MRR × 100

For example, if you start a quarter with €100,000 in MRR from existing customers, gain €15,000 from upgrades, lose €3,000 from downgrades, and €7,000 from cancellations, your NRR is 105%.

What Good NRR Looks Like

According to SaaS Capital's 2025 benchmarks, the median NRR for B2B SaaS companies is 106%. Enterprise-focused companies lead with a median of 118%, mid-market sits at 108%, and SMB-focused SaaS averages 97%. Best-in-class companies across all segments achieve NRR above 130%.

An NRR below 100% means the company is shrinking its revenue base each period and must acquire enough new customers to offset the losses. Sustained NRR below 90% is a serious warning sign for any subscription business.

NRR vs GRR: What Each Metric Reveals

NRR and GRR (Gross Revenue Retention) measure different aspects of customer revenue health. GRR excludes expansion revenue, showing only how much existing revenue you're keeping. NRR includes expansion, showing the net effect of all revenue changes from existing customers.

A company with 85% GRR and 115% NRR is losing significant revenue to churn and downgrades, but more than making up for it with upgrades. That's a different story from a company with 95% GRR and 105% NRR — lower expansion but a healthier base.