NRR — Net revenue retention
Net revenue retention measures what a group of customers bills today against what they billed a year ago, counting what was lost to cancellations and contractions and what was gained from expansion by those same customers. It excludes new customers: it measures what the existing base does.
What is net revenue retention?
Net revenue retention measures what a group of customers bills today against what they billed a year ago, counting what was lost to cancellations and contractions and what was gained from expansion by those same customers. It excludes new customers: it measures what the existing base does.
Also: NRR · NDR · net dollar retention
Above 100% is not an error
An NRR of 115% means the customers you already had bill 15% more than a year ago, even though some of them left. It is possible because expansion from the ones who stay exceeds what was lost, and it is the best place a SaaS can be: growing without selling to anybody new.
Why it matters
What changes in a SaaS
It is the metric investors look at most and the one that best summarises whether the product becomes more important over time or less. It is also what connects support to money: a customer who expands is nearly always a customer for whom what they bought worked, and that required somebody resolving whatever was blocking them.
Net revenue retention in detail
How it is calculated
Recurring revenue today from a group of customers, divided by what that same group billed twelve months ago. Counting nobody who arrived in between. The group has to be identical on both dates or the number means nothing.
Gross and net
Gross retention only subtracts — cancellations and contractions — and never exceeds 100%. Net also adds expansion. Looking at both at once tells you whether you are growing because nobody leaves or because the ones who stay buy more.
What actually moves it
The product growing with the customer: more seats, more volume, more features bought when they are needed. A flat-price product has an NRR ceiling of 100% by design, and that is a business model decision, not a customer success problem.
Questions about net revenue retention
What is a good NRR?
Above 100% means the base grows on its own. Industry benchmarks vary a lot with the pricing model, so comparing without looking at how you bill misleads.
Are NRR and NDR the same?
Yes. Net Revenue Retention and Net Dollar Retention are used interchangeably for the same thing.
Related terms
A term on its own is only half understood. These come up in the same conversation.
Churn
Churn is the percentage of customers — or of revenue — lost in a period. It is the metric that decides whether a subscription business genuinely grows: with high churn, every new customer only fills the hole left by another.
MRR — Monthly recurring revenue
MRR is the sum of recurring revenue a subscription business bills each month, normalising annual contracts to their monthly equivalent. It excludes anything that does not repeat — implementations, consulting, one-off charges — because its job is to measure the stable base.
Health score
A health score is a rating that summarises, in one number, how likely an account is to stay a customer. It combines usage, adoption and relationship signals — how many people log in, which features they use, how many tickets they open, how they respond — into something that can be sorted highest to lowest.
Expansion
Expansion is the increase in what an existing customer pays: more seats, more volume, a higher plan or a new module. It is the cheapest source of growth a SaaS has, because nobody has to be convinced to trust you for the first time.
CSM — Customer Success Manager
A Customer Success Manager (CSM) is the person responsible for making sure a customer gets the outcome they signed up for. They work proactively across a book of accounts, own adoption, retention and expansion, and their success is measured in renewals, not in closed tickets.
TTV — Time to value
The time between a customer signing up and getting something out of the product that genuinely matters to them. It is not setup time and it is not the first session: it is when the product has solved, for the first time, the problem they paid for.
