The single metric that tells you whether your existing customer base is growing or quietly shrinking — even while new sales look healthy.
Updated: 24 September 2026
Net revenue retention (NRR) measures the percentage of recurring revenue you retain from your existing customer base over a period, including expansion (upsells, upgrades) and contraction (downgrades, partial cancellations), but excluding revenue from new customers. An NRR above 100% means your existing customers are spending more over time than they're losing to downgrades and churn combined — growth that doesn't depend on new sales at all. Below: the formula, what counts as good, and the levers that actually move it.
Net revenue retention is calculated as:
NRR = (Starting MRR + Expansion − Contraction − Churned Revenue) ÷ Starting MRR × 100
Take the recurring revenue you had from a cohort of customers at the start of a period. Add revenue gained from upsells and upgrades within that same cohort. Subtract revenue lost to downgrades and to customers who cancelled entirely. Divide by the starting figure. New customers acquired during the period are deliberately excluded — NRR is a pure measure of what happens to the customers you already have.
Say your existing customer base generated $100,000 in monthly recurring revenue (MRR) at the start of the month. During the month, $8,000 in expansion revenue came from upgrades, $3,000 was lost to downgrades, and $5,000 was lost to customers who cancelled. NRR = (100,000 + 8,000 − 3,000 − 5,000) ÷ 100,000 × 100 = 100%. Expansion exactly offset contraction and churn — the base held steady in revenue terms even though some individual customers left or downgraded.
Benchmarks vary by business model, but as general reference points: 100%+ means your existing customers alone are growing your revenue, independent of new sales — a strong position. 90–100% is common and workable for many B2B SaaS and subscription businesses, provided new sales cover the gap. Below 90% usually signals a retention problem worth investigating before it compounds: at that rate, a meaningful share of your revenue base disappears every year regardless of how well new sales perform.
Gross revenue retention (GRR) is a stricter, more conservative sibling metric: it measures the same starting revenue minus contraction and churn, but caps the result at 100% by excluding expansion entirely. GRR answers "how much would I have left with zero upsells," while NRR answers "how did my existing base actually perform, upsells included." Track both if you can — a high NRR propped up almost entirely by expansion in a small number of large accounts, with a mediocre GRR underneath, is a different (and riskier) situation than the same NRR built on a broadly healthy base.
NRR is a revenue metric; logo churn counts customers, not dollars. The two can diverge sharply: it's entirely possible to lose a large number of small accounts (high logo churn) while NRR stays strong, because a smaller number of large accounts expanded enough to cover the loss. Neither metric alone tells the full story — a business obsessing only over NRR can miss a genuine problem with its smallest customers, since a landlord effect from a few large expanding accounts will mask it in the aggregate number.
Because NRR combines expansion, contraction and churn into one number, there are really three separate levers: drive expansion (usage-based upsells, cross-sell, seat growth as the customer's team grows), limit contraction (catch downgrade requests early and understand why they're happening), and reduce churn (the largest lever for most companies, and the one churn prediction is built to address). Of the three, churn prevention usually has the most headroom: expansion revenue on a shrinking base is a treadmill, while keeping the accounts you already have compounds.
Identifying which accounts are at risk of contraction or churn before it shows up in the NRR calculation is exactly what a customer health score is for — it turns "NRR dropped last quarter" into "these specific twelve accounts are trending down, and here's why," early enough to act.
Calculating NRR accurately means pulling together billing, usage and contract data in one place. Many teams do this in a cloud platform that requires sending that same data to a third party; a self-hosted approach keeps the underlying customer and revenue data on your own infrastructure while still surfacing which accounts are driving expansion or contraction — see how Lonieta handles data residency for the detail.
Net revenue retention is the percentage of recurring revenue retained from your existing customer base over a period, including expansion from upsells and upgrades, and subtracting revenue lost to downgrades and churn. New customer revenue is excluded.
NRR = (Starting MRR + Expansion − Contraction − Churned Revenue) ÷ Starting MRR × 100.
100% or above means existing customers alone are growing revenue. 90–100% is common for many B2B SaaS businesses. Below 90% typically signals a retention problem worth investigating.
NRR includes expansion revenue from upsells and can exceed 100%. GRR excludes expansion and is capped at 100%, making it a more conservative measure of how much revenue you'd keep with zero upsells.
See which customers are trending toward expansion or churn, with an explainable risk score for every account.