All termsMETRICS & KPIS

NRR

Net Revenue Retention

Also known as: Net Revenue Retention · NDR · Net Dollar Retention

DEFINITION

The percentage of revenue retained from existing customers after accounting for expansion, contraction, and churn.

In depth

NRR is the single strongest signal of product-market fit and long-term SaaS health. NRR over 100% means your existing customer base grew revenue on its own, even before adding new customers — a rare, extremely valuable property.

Best-in-class public SaaS companies post NRR of 120–140%. Below 90% is a warning sign: customers are leaving or downgrading faster than they're expanding.

Formula & example

NRR = (Starting ARR + Expansion − Contraction − Churn) ÷ Starting ARR
EXAMPLEStart quarter with $1M ARR. +$200K expansion, −$50K contraction, −$100K churn → NRR = ($1M + $200K − $50K − $100K) ÷ $1M = 105%.

Rules of thumb

  • 100% = treading water. 110–120% = strong. 130%+ = world class.
  • Enterprise SaaS should target 120%+; SMB is more like 100–110%.
  • NRR > 100% means you could stop acquiring new customers and still grow.

Related terms

Churn
The percentage of customers (or revenue) a SaaS loses in a given period. Low churn compounds growth; high churn silently kills it.
Expansion Revenue
Additional revenue from existing customers through upgrades, add-ons, seat growth, or usage.
ARR
The yearly version of MRR — the total recurring subscription revenue a SaaS would earn over 12 months at today's run rate.

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Last reviewed 14 April 2026 by Abhi Verma.