NRR (Net Revenue Retention)

Definition

NRR measures how revenue from an existing cohort changes over time, including expansion and contraction.

Formula

NRR = (starting MRR + expansion - contraction - churn) / starting MRR

Example

If starting MRR is $100k, expansion is $15k, contraction is $5k, and churn is $10k, NRR = ($100k+$15k-$5k-$10k)/$100k = 100%.

How to use it

• NRR > 100% means the cohort grows without new customers.
• Track NRR by segment (plan, size) to avoid blended averages.

Common mistakes

• Using different cohorts for starting MRR vs expansion/churn (inconsistent denominators).
• Letting expansion hide churn (track GRR alongside NRR).

Why this matters

This term matters because small changes compound in SaaS metrics. Use consistent definitions by cohort and segment so you can diagnose retention, payback, and growth quality.

Practical checklist

• Write a 1-line definition for "NRR (Net Revenue Retention)" that your team will use consistently.
• Keep the time window consistent (weekly/monthly/quarterly) when comparing trends.
• Segment results (channel/plan/cohort) before drawing big conclusions from blended averages.
• Use a calculator that references this term (e.g., NRR Calculator) to sanity-check assumptions.
• Read the related guide (e.g., NRR (Net Revenue Retention): definition, formula, how to calculate) for context and common pitfalls.

Where to use this on MetricKit