NRR: what net revenue retention means, how to calculate it, and NRR vs GRR

NRR (net revenue retention) is the share of recurring revenue you keep from an existing group of customers over a period, after adding their upgrades and subtracting their downgrades and cancellations. An NRR above 100% means your customer base grows on its own, even if you sign no one new.

Net dollar retention (NDR) is the same metric under another name. Its stricter sibling, gross revenue retention (GRR), leaves upgrades out.

NRR and GRR formulas

Take the customers who were paying at the start of the period, and only them:

NRR = (starting MRR + expansion − contraction − churned MRR)
      / starting MRR × 100

GRR = (starting MRR − contraction − churned MRR)
      / starting MRR × 100

For an annual NRR, starting MRR is what that group paid twelve months ago, and the numerator is what the same customers pay today. New customers who joined during the year are left out entirely, including their upgrades.

A worked NRR example

In October 2025 a company had 200 paying customers with $50,000 of MRR. Twelve months later, the same 200 customers look like this:

NRR = 52,500 / 50,000            = 105%
GRR = (50,000 − 2,000 − 4,500) / 50,000 = 87%

The company signed plenty of new customers during the year too, but none of them appear here. That is the point: NRR isolates what happens after the sale.

NRR vs GRR

Read them together. In the example, a 105% NRR looks healthy, but an 87% GRR says 13% of starting revenue walked out, and a strong upsell motion is covering it. If upgrades slow down, NRR drops below 100% quickly. A company with 101% NRR and 97% GRR has the opposite profile: little expansion, very few losses.

NRR calculator

Put starting MRR, expansion, contraction and churned MRR in columns B to E of a spreadsheet, one row per period:

NRR  (F2):  =(B2+C2-D2-E2)/B2
GRR  (G2):  =(B2-D2-E2)/B2
monthly NRR to annual:  =F2^12

Format F and G as percentages. A monthly NRR of 101% compounds to about 112.7% over a year, not 112%.

A benchmark you can cite

SaaS Capital's 2025 B2B SaaS retention survey (run in the first quarter of 2025, more than 1,000 private B2B SaaS companies) put the median NRR at 101% and the median GRR at 91%. It measured December 2024 revenue from customers who were already customers in December 2023 against December 2023 revenue, and found that companies with larger contract values had higher retention.

Common NRR mistakes

• Letting new customers in. Comparing total MRR now with total MRR a year ago is growth, not retention.
• Counting expansion from customers who joined during the year. They weren't in the starting group.
• Annualizing a monthly figure by multiplying. Compound it instead.
• Treating a returning customer as retained. If they canceled and came back, most teams count the return as new or reactivated, not as retention.
• Quoting only NRR. Without GRR next to it, nobody can tell whether the base is sticky or just well upsold.

Related metrics

• Churn: customer vs revenue churn. GRR is 100% minus gross revenue churn over the same period.
• Monthly recurring revenue: the movements NRR is built from.
• Annual recurring revenue: NRR applied to last year's ARR tells you how much of this year's ARR the existing base delivers.
• LTV to CAC: higher retention means a longer customer lifetime.

Get the inputs automatically every week

The Stripe weekly MRR report skill splits every week's MRR change into new, expansion, contraction and churn from Stripe subscription events. Ask your agent to keep the expansion and contraction of customers who were already paying apart from new business, and the monthly NRR and GRR fall out of the same numbers. The Stripe monthly churn report adds revenue churn and the reasons behind it on the 1st of each month.