Net Revenue Retention.

Net Revenue Retention (NRR), also called Net Dollar Retention (NDR), measures how much recurring revenue from a cohort of existing customers is retained over a period, accounting for churn, contraction (downgrades), and expansion (upsells, cross-sells, seat growth). NRR above 100% means the existing customer base grows revenue even with zero new customers.

Why NRR Is the Most Important SaaS Metric

NRR captures both retention health (do customers stay?) and monetisation efficiency (do they grow?). A company with 120% NRR doubles revenue every five years from existing customers alone, independent of new acquisition. Best-in-class SaaS companies (Snowflake at peak, Twilio) have reported NRR above 130%.

Gross Revenue Retention vs. NRR

Gross Revenue Retention (GRR) measures only downward movement — churn and contraction — and is capped at 100%. NRR adds expansion revenue and can exceed 100%. GRR ≥ 85% is considered healthy for mid-market SaaS; ≥ 90% for enterprise. A high GRR with low NRR indicates strong retention but weak expansion — often a product or pricing problem.

Improving NRR

NRR improvement comes from reducing churn (better onboarding, customer success, product improvements), reducing contraction (removing downgrade paths, enforcing minimum commitments), and driving expansion (usage-based pricing that scales with value, premium tier features, adjacent product upsells). Net negative churn — NRR > 100% — is the holy grail of SaaS unit economics.