Net Revenue Retention (NRR)
The percentage of recurring revenue retained from an existing customer cohort after netting expansion against churn and downgrades — above 100%, the base grows without any new sales.
Net Revenue Retention takes the recurring revenue of an existing customer cohort at the start of a period, then asks what that same cohort is worth at the end: starting revenue, plus expansion, minus contraction and churn, divided by starting revenue. An NRR above 100 percent means the customer base grows by itself — before a single new customer is signed — which is why it is among the most scrutinized numbers in SaaS: it determines whether growth compounds or leaks.
NRR is best read alongside gross revenue retention, which excludes expansion and is capped at 100 percent. A strong NRR built on weak GRR means expansion from a few accounts is papering over churn across many — a fragile position. Moving NRR is therefore two motions, not one: close the leak (onboarding quality, risk detection, renewal discipline) and open the tap (systematically finding and qualifying expansion readiness in the healthy base). Teams that only chase expansion while the base leaks are refilling a bathtub with the drain open.