Net revenue retention (NRR), sometimes called net dollar retention, is the metric investors anchor on more than any other, because it measures whether your business grows even if you never sign another customer. Here's how to compute it and read it.
NRR = (Starting MRR + Expansion − Contraction − Churn) ÷ Starting MRR, measured for a fixed cohort over a period (usually 12 months), excluding new customers acquired during the period.
The "fixed cohort, no new logos" part is essential. NRR asks: take the customers you had at the start, and what is their revenue worth now? New customers are growth, but they aren't retention.
Take the cohort of customers worth $100,000 MRR a year ago. Over the year:
NRR = ($100,000 + $25,000 − $8,000 − $12,000) ÷ $100,000 = $105,000 ÷ $100,000 = 105%.
Gross revenue retention (GRR) ignores expansion: (Starting − Contraction − Churn) ÷ Starting. GRR can never exceed 100%; it tells you how leaky the bucket is. NRR can exceed 100% because expansion fills the bucket faster than losses drain it. Report both — a high NRR hiding a low GRR means you're patching heavy churn with a few big expansions, which is fragile.
High NRR means revenue compounds without proportional acquisition spend, so the company gets more capital-efficient as it scales. Two companies with identical ARR but NRR of 90% vs 120% have completely different futures — and valuations.
The common error is letting new customers leak into the cohort, which inflates NRR. You need a customer-keyed model that tracks each account's revenue across periods. A dashboard that builds the cohort correctly computes NRR (and GRR) you can defend in diligence.
The template we recommend tracks revenue per account across months and reports both NRR and GRR from one pasted export.
NRR = (Starting MRR + Expansion − Contraction − Churn) ÷ Starting MRR, for a fixed cohort over a period, excluding new customers. It measures whether existing customers grow in value over time.
100% is solid, 110%+ is strong, and 120%+ is exceptional. Below 90% signals a retention problem that acquisition spend can't outrun.
Gross revenue retention excludes expansion and can't exceed 100%, showing how leaky your bucket is. NRR includes expansion and can exceed 100% when upsell outpaces churn.
Page built 2026-06-14 from public, dated buying-intent signals. Updated as new signals land.