Net revenue retention

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Definition
Net revenue retention (NRR) is the percentage of revenue retained from existing customers over a period, including upgrades, downgrades, and cancellations.

Prerequisite

Monthly recurring revenue (MRR) is the predictable revenue a business can expect each month from active subscriptions.

Formula

NRR = (Starting MRR + Expansion – Contraction – Churn) / Starting MRR

Importance

NRR is a key SaaS metric that shows how much recurring revenue you retain from your existing customer base over time, including upsells, expansions, downgrades, and churn.

NRR (%) answers the question: "If I start the month with $100 in recurring revenue from existing customers, how much do I have at the end after upgrades, downgrades, and churn?"

NRR > 100% → Revenue is growing from the existing customer base (healthy sign).
NRR = 100% → No net change from existing customers.
NRR < 100% → Losing net revenue from existing customers.

NRR is a strong indicator of product stickiness and customer satisfaction. A consistently high NRR shows that customers:

Stay subscribed
Expand their usage
Are less likely to churn

Visualizations

NRR chart

Description

The NRR line chart visualizes net revenue retention.

Chart components

X-axis: Time (monthly intervals from Jan 2024 to May 2025).
Y-axis: NRR percentage (0% to 120%).
Line trend: Tracks how NRR fluctuated month over month.

Interpretation & insights

NRR mostly hovers around 100%, showing stable retention.
Occasional dips (e.g., around Mar 2025) indicate possible contraction or churn.
Occasional rises (e.g., Apr 2025) suggest expansion or upsells among existing customers.

NRR table

Table layout

Column	Description
Posting date: Month	The period for which revenue is measured
Starting MRR	Recurring revenue at the beginning of the month
Expansion MRR	Revenue growth from existing customers (e.g., upsells or usage increases)
Contraction MRR	Revenue lost from downgrades or reduced usage
Churn MRR	Revenue lost due to cancellations or customer exits
NRR	Net Revenue Retention rate = (Starting MRR + Expansion MRR − Contraction MRR − Churn MRR) / Starting MRR; displayed as a percentage and visual bar

Interpretation & insights

Use the table to track revenue trends, identifying months with significant expansion or decline.
Spot months with high churn or contraction and investigate root causes.
Compare NRR alongside growth and customer success initiatives.
Examples from the table:
- May 2025 shows no churn or contraction, resulting in a strong NRR of 102.8%.
- February 2025 reveals a significant –4,220.50 churn MRR, pulling NRR down to 95.52% despite a high starting MRR.

Updated 20 days ago