Net Revenue Retention (NRR)
Net Revenue Retention (NRR) measures the percentage of recurring revenue retained from existing customers over a period, accounting for upgrades, downgrades, and churn — but excluding new customer revenue.
NRR is calculated as: (Starting MRR + Expansion - Contraction - Churn) / Starting MRR × 100.
An NRR above 100% means existing customers are generating more revenue than the previous period — even without new sales. Top SaaS companies achieve 120-140% NRR. The industry median is 108%.
Revenue leakage directly depresses NRR by increasing apparent churn (failed payments counted as churned) and reducing expansion revenue (upgrades not properly billed). Fixing revenue leakage typically improves NRR by 3-8 percentage points.
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