Definition
The percentage of recurring revenue retained and grown from an existing customer cohort over a period, including expansion.
Formula
(Starting MRR + Expansion - Contraction - Churn) / Starting MRR x 100
How to measure
Track a fixed customer cohort's MRR from the start of a period, then measure their combined MRR one period later, including upgrades and downgrades.
Why track it
NRR above 100% means existing customers alone are growing the business, which is one of the clearest signals of strong product-market fit.
Example
A cohort starting at $500,000 MRR grows to $560,000 a year later after expansion outweighs churn, a 112% NRR.
FAQ
- What is Net Revenue Retention?
- The percentage of recurring revenue retained and grown from an existing customer cohort over a period, including expansion.
- How do you calculate Net Revenue Retention?
- (Starting MRR + Expansion - Contraction - Churn) / Starting MRR x 100
- Why track Net Revenue Retention?
- NRR above 100% means existing customers alone are growing the business, which is one of the clearest signals of strong product-market fit.