SaaS Metrics

Net Retention

Net retention is the same idea as NRR: revenue retained from a cohort including expansion and contraction.

Written by MetricKit EditorialReviewed by MetricKit Editorial ReviewUpdated 2026-01-23
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Definition

Net retention is the same idea as NRR: revenue retained from a cohort including expansion and contraction.

Formula

Net retention = (starting revenue + expansion - contraction - churn) / starting revenue

Measured as

Net retention = (starting revenue + expansion - contraction - churn) / starting revenue

Operator takeaway

  • Keep Net 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 Retention Curve Calculator if you need to turn the definition into an operating assumption.
  • Read Retention curves: how to read them and why they matter if the decision depends on interpretation, policy, or trade-offs beyond the raw formula.

Where to use this on MetricKit

Calculators

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