Full Definition
Net Revenue Retention (NRR), also called Net Dollar Retention (NDR), measures how much revenue is retained from existing customers over a period, including the effects of upgrades, downgrades, and churn. NRR above 100% means the company is growing revenue from its existing customer base even without adding new customers.
Formula: NRR = (Starting MRR + Expansion - Contraction - Churn) ÷ Starting MRR × 100%
NRR Benchmarks
- Best-in-class SaaS: 130%+ (e.g., Snowflake, Twilio)
- Strong: 110-130%
- Good: 100-110%
- Concerning: Below 100% (shrinking existing revenue)
Why NRR Matters
High NRR is one of the most valued metrics by SaaS investors because it proves that existing customers are finding increasing value in the product. Companies with 120%+ NRR can grow significantly even with modest new customer acquisition.
Real-World Example
A company starts the year with $1M MRR from existing customers. Through upsells (+$300K) and churn (-$100K), it retains $1.2M from that same cohort — 120% NRR.
Related Terms
The percentage of customers or revenue lost over a specific period, a key SaaS health metric.
Predictable, recurring revenue from subscriptions, measured monthly (MRR) or annually (ARR).
The direct revenues and costs associated with a single unit of a business model (typically per customer).
The total revenue a business can expect from a single customer throughout their entire relationship.
The stage where a product satisfies strong market demand, indicated by rapid organic growth.
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