The percentage of recurring revenue you retain from existing customers over a period, including expansion and after losses.
NRR = ((starting MRR + expansion − contraction − churn) ÷ starting MRR) × 100
A cohort starts at £100,000 MRR. Over the period: +£15,000 expansion, −£4,000 contraction, −£6,000 churn.
((£100,000 + £15,000 − £4,000 − £6,000) ÷ £100,000) × 100 = 105% NRR
NRR (also called net dollar retention) measures what happened to the revenue from a cohort of existing customers over time — counting upgrades and add-ons, and subtracting downgrades and cancellations. New customers are excluded entirely; this is purely about your existing base.
Above 100% means your existing customers are spending more in aggregate than they were, even after some left. That is the signature of a business that grows from within: expansion outweighs churn.
NRR is the inverse of net revenue churn. If net revenue churn is −5%, NRR is 105%. It is one of the metrics investors scrutinise most closely because it reveals whether growth is durable or dependent on constant new acquisition.
NRR above 100% means you could stop acquiring customers entirely and still grow. It is the clearest signal of product stickiness and pricing power, and it compounds — high NRR is one of the strongest predictors of long-term SaaS value.
Above 100% is good; best-in-class SaaS achieve 120%+. Enterprise products tend to post higher NRR than SMB-focused ones.
No. NRR measures only the revenue from a fixed set of existing customers — expansion, contraction, and churn within that base. New customer revenue is excluded so the metric isolates retention.
Anything above 100% is healthy because it means existing customers grow revenue on their own. Best-in-class SaaS reach 120% or more. NRR is the inverse of net revenue churn.
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