Net Revenue Retention (NRR)

NRR measures how much revenue you keep from your existing customer base over a given period, including upgrades, downgrades, and cancellations. An NRR above 100% means your existing customers are generating more revenue than they were last period, even before you add a single new sign-up. That's the gold standard.

The formula

NRR = (Starting MRR + Expansion MRR − Contraction MRR − Churned MRR) / Starting MRR × 100

Say you started the month with $100,000 in MRR. Upgrades added $8,000. Downgrades cost you $2,000. Cancellations and failed payments lost $5,000. Your NRR is 101%. You grew your existing revenue by 1% without counting any new customers.

That 1% matters more than it sounds.

What good looks like

For B2B SaaS, anything above 100% is healthy. Best-in-class companies sit between 110% and 130%. Snowflake famously reported NRR above 150%, which meant existing customers were spending 50% more year over year. In our experience, most bootstrapped SaaS businesses should target 95% or higher and work toward crossing the 100% threshold.

Here's the thing: below 90% is a red flag. It means you're losing revenue from your installed base faster than you can expand it, which forces you to rely entirely on new acquisition to grow. That's an expensive treadmill.

NRR vs GRR

NRR includes expansion revenue. Gross revenue retention (GRR) doesn't. GRR only looks at how much existing revenue you kept, ignoring upsells and cross-sells. Think of GRR as your floor (how sticky is the product?) and NRR as your ceiling (how well do you monetise the customers who stay?). For the full comparison, see NRR vs GRR.

You'll also see NRR referred to as net dollar retention (NDR). They're the same metric. NDR is more common in investor communications, while NRR is the standard in SaaS operations.