NRR (Net Revenue Retention)
Net Revenue Retention measures revenue growth from existing customers. Includes expansions minus churn. Above 100% means you grow without new customers.
What Is Net Revenue Retention (NRR)? Formula and Benchmarks
Formula: NRR = ((Starting ARR + Expansion - Churn - Contraction) / Starting ARR) x 100. Example: start year with $1M ARR from cohort, lose $100k to churn, gain $300k from expansions. NRR = $1.2M / $1M = 120%. Best SaaS companies have NRR over 120%. Below 100% means you are shrinking existing accounts faster than expanding them.
Examples
A company starts the year with $1M in ARR from an existing cohort. Over the year that cohort loses $150,000 to churn but adds $350,000 through upsells and expansions. NRR = ($1M minus $150,000 plus $350,000) divided by $1M, times 100, which is 120 percent.