Net revenue retention (NRR / NDR)

Q: What is a good net revenue retention?

Above 100 percent is great because it means you grow recurring revenue from existing customers even without winning new logos. 110 percent and up is best-in-class, 90 to 100 percent is acceptable, and below 90 percent is leaky and a sign your base is shrinking.

Q: Are NRR and NDR the same thing?

Yes. Net revenue retention and net dollar retention are two names for the same metric. Both measure how recurring revenue from your existing customer base changes over a period after expansion, contraction, and churn, excluding revenue from brand-new customers.

Q: How is NRR different from gross retention?

Gross retention only counts losses — churn and contraction — and can never exceed 100 percent. Net retention also adds expansion revenue from upsells and upgrades, so it can rise above 100 percent when existing customers spend more than the revenue you lose.

How much recurring revenue you keep — and grow — from the customers you already have, before winning a single new one. The metric investors treat as the truest sign of a durable business.

In plain English

Net revenue retention takes a cohort of existing customers and asks: a year later, is the revenue from this exact group bigger or smaller? It nets three forces together — expansion (upsells and upgrades push it up), contraction (downgrades pull it down), and churn (cancellations pull it down too). If expansion outweighs the losses, NRR climbs above 100% and the business grows even with zero new customers. That's why it's the metric investors love: a company above 100% has a base that compounds on its own, while one below 100% has to run hard on acquisition just to refill a leaking tank. NRR and NDR (net dollar retention) are the same thing under two names.

The formula

NRR = (Starting MRR + Expansion − Contraction − Churn) ÷ Starting MRR

Crucially, this only counts revenue from customers who existed at the start of the period — brand-new customers are excluded, so NRR isolates the health of your existing base.

A worked example

Take a cohort that started the period at €100,000 MRR. Over the period they added €15,000 in expansion, lost €3,000 to contraction (downgrades), and lost another €7,000 to churn.

NRR = (€100,000 + €15,000 − €3,000 − €7,000) ÷ €100,000 = 105%

At 105%, that cohort is worth more today than a year ago despite the losses — expansion more than covered the leaks. Layer new customers on top of a base like that, and overall growth accelerates.

What's a good net revenue retention?

The dividing line is 100% — below it your base shrinks, above it it grows:

NRR	Verdict	What it means
110%+	Best-in-class	Strong expansion engine
> 100%	Great	You grow without new logos
90–100%	Acceptable	Holding steady, modest leak
< 90%	Leaky	Base is shrinking; fix retention

Remember NRR and NDR are identical metrics. The best SaaS businesses push well past 110% by building expansion — seats, usage, upgrades — into the product, so existing customers become a growth engine in their own right.

Frequently asked questions

What is a good net revenue retention?

Above 100 percent is great because it means you grow recurring revenue from existing customers even without winning new logos. 110 percent and up is best-in-class, 90 to 100 percent is acceptable, and below 90 percent is leaky and a sign your base is shrinking.

Are NRR and NDR the same thing?

Yes. Net revenue retention and net dollar retention are two names for the same metric. Both measure how recurring revenue from your existing customer base changes over a period after expansion, contraction, and churn, excluding revenue from brand-new customers.

How is NRR different from gross retention?

Gross retention only counts losses — churn and contraction — and can never exceed 100 percent. Net retention also adds expansion revenue from upsells and upgrades, so it can rise above 100 percent when existing customers spend more than the revenue you lose.

Revenue churn · Expansion revenue · Churn rate · Quick ratio

Learn more

The complete guide to value-based bidding · Value-based bidding without a data team