Definition
The percentage of recurring revenue retained from an existing customer cohort over a period, including expansions, contractions, and churn.
Why it matters for growth
NRR above 100% means the existing customer base is growing revenue on its own, which is one of the strongest signals of durable product value.
Example
A company starts the year with $1M in ARR from its existing customers and ends with $1.15M from that same cohort, an NRR of 115%.
FAQ
- What is Net Revenue Retention (NRR)?
- The percentage of recurring revenue retained from an existing customer cohort over a period, including expansions, contractions, and churn.
- Why does Net Revenue Retention (NRR) matter for growth?
- NRR above 100% means the existing customer base is growing revenue on its own, which is one of the strongest signals of durable product value.
- What is an example of Net Revenue Retention (NRR)?
- A company starts the year with $1M in ARR from its existing customers and ends with $1.15M from that same cohort, an NRR of 115%.