Net Revenue Retention (NRR)

Net revenue retention (NRR) is a SaaS metric measuring a company’s ability to retain and expand recurring revenue from its existing customer base over a set time period. Unlike basic retention metrics, NRR accounts for both revenue gains and losses within the current customer cohort, including upsells, expansions, downgrades and churn. It is widely used to evaluate customer retention, expansion performance and long-term revenue health.

This metric focuses exclusively on existing customers and does not include revenue from new customer acquisition. Companies calculate NRR by comparing recurring revenue at the beginning of a period against the revenue generated from that same customer group after accounting for expansion revenue and lost revenue. 

An NRR above 100% indicates that revenue growth from existing customers exceeds losses from churn or contraction, while a lower percentage may point to retention or adoption challenges.

In B2B SaaS, net revenue retention is considered an important indicator of sustainable growth and customer value. When managed effectively, strong NRR reflects successful onboarding, product adoption, customer success and expansion strategies working together over time. It also helps companies and investors understand how efficiently a business can grow revenue within its existing customer base.

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