Definition
GRR measures how much of a cohort's starting revenue remains after churn and downgrades, excluding expansion.
Formula
GRR = (starting MRR - contraction - churn) / starting MRR
Example
If starting MRR is $100k, contraction is $5k, and churn is $10k, GRR = ($100k-$5k-$10k)/$100k = 85%.
How to use it
- GRR isolates durability (product stickiness) from expansion.
- Use GRR to validate that growth isn't masking underlying churn.
Common mistakes
- Including expansion in GRR (by definition it's excluded).
- Mixing cohorts or time windows (start from one cohort, losses from another).
Measured as
GRR = (starting MRR - contraction - churn) / starting MRR
Misused when
- Including expansion in GRR (by definition it's excluded).
- Mixing cohorts or time windows (start from one cohort, losses from another).
Operator takeaway
- GRR isolates durability (product stickiness) from expansion.
- Use GRR to validate that growth isn't masking underlying churn.
- Keep GRR (Gross Revenue Retention) consistent by cohort, segment, and period before you use it as a decision signal in planning or reporting.
- Interpret the metric alongside retention, margin, or payback so one ratio does not hide the real operating trade-off.
Next decision
- Quantify the impact with GRR Calculator if you need to turn the definition into an operating assumption.
- Read GRR (Gross Revenue Retention): definition, formula, how to calculate if the decision depends on interpretation, policy, or trade-offs beyond the raw formula.
Where to use this on MetricKit
Calculators
- GRR Calculator: Calculate Gross Revenue Retention (GRR) from starting MRR, contraction, and churn.
- NRR Calculator: Calculate Net Revenue Retention (NRR) from starting MRR and revenue movements.
- NRR vs GRR Calculator: Calculate NRR and GRR together from the same starting MRR and expansion/contraction/churn inputs.
- MRR Forecast Calculator: Monthly Projection, Formula, and Example: Project future MRR using new MRR, expansion, contraction, churn, and time horizon inputs with a simple monthly forecast model.
- Price Increase Break-even Calculator: Estimate the maximum churn (immediate or ongoing) a price increase can tolerate before it destroys revenue.
Guides
- GRR (Gross Revenue Retention): definition, formula, how to calculate: GRR explained: gross revenue retention definition, GRR formula, how to calculate it, and why it matters alongside NRR.
- NRR (Net Revenue Retention): definition, formula, how to calculate: NRR explained: what net revenue retention measures, the NRR formula, how to calculate it by cohort, and common mistakes.
- NRR vs GRR: differences, formulas, and how to use both: NRR includes expansion; GRR excludes it. Learn when each metric matters, how to compute both from the same cohort, and how to interpret the gap.
- Retention & churn hub: cohorts, GRR/NRR, and retention curves: A practical hub for retention measurement: churn rate, GRR/NRR, cohort retention curves, and how to set retention targets without getting misled by noise.
- Churn: How to measure churn rate correctly: A guide to churn rate: customer churn vs revenue churn, measurement choices, and how to track churn by cohort.