NRR (Net Revenue Retention)
The percentage of last-year cohort revenue retained this year, net of churn and expansion.
Net Revenue Retention (NRR) is the percentage of revenue retained from a customer cohort over 12 months, including expansion revenue and subtracting churn. NRR > 100% means expansion from retained customers exceeds churn — the customer base grows in value without new acquisitions.
Context
NRR is one of the most-watched SaaS health metrics. Best-in-class SaaS companies maintain NRR above 120%; healthy is above 110%; under 100% means the customer base is shrinking in value.
High NRR means new customers are additive to growth, not replacement for churn. Companies with NRR over 120% can grow at 30–50% annually with minimal new-customer acquisition because the existing base expands fast enough.
A $10M ARR SaaS with 125% NRR retains $12.5M from last year's cohort before any new customers. Adding $3M in new-customer ARR produces $15.5M total ARR — 55% growth mostly from the existing base.
NRR can be gamed by concentrating churn in low-revenue accounts while growing high-revenue accounts. The honest view combines NRR with Gross Retention (churn only, without expansion); a company with 120% NRR and 80% Gross Retention is churning a lot and masking it with expansion.
Related terms
Services that apply this
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A description of the best-fit customer for a B2B product.
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MQL (Marketing Qualified Lead)
A lead that marketing judges ready for sales follow-up.
SQL (Sales Qualified Lead)
A lead that sales has accepted as worth active pursuit.