Formula
How to Calculate Gross Revenue Retention
The percentage of recurring revenue retained from existing customers over a period, excluding any expansion revenue from upsells — measures pure churn.
Gross Revenue Retention
GRR = (Starting MRR - Churned MRR - Contraction MRR) / Starting MRR x 100%
Where
- Starting MRR
- = MRR at the start of the period
- Churned MRR
- = MRR lost from cancelled customers
- Contraction MRR
- = MRR lost from downgrades
What Is Gross Revenue Retention?
GRR measures how much revenue a company retains from its existing customer base purely from subscription renewals, excluding any additional revenue from upsells, seat expansion, or price increases. It can only be equal to or less than 100% — if customers only churn and never expand, GRR is the right measure. GRR Formula: (Starting ARR - Churned ARR - Downgrade ARR) / Starting ARR x 100 GRR above 90% is generally considered strong for SMB SaaS; above 95% for enterprise.
Worked Example
A company starts the year with $10M ARR from existing customers. $500K churns, $200K downgrades. GRR = ($10M - $500K - $200K) / $10M = 93%. Even if the company added $2M in new ARR and $1M in expansions, GRR is still 93%.
Why Gross Revenue Retention Matters
GRR exposes the underlying health of retention without the flattering effect of expansion revenue. A company with 80% GRR but 120% Net Revenue Retention is growing despite significant churn — a potentially fragile business that depends on upsells to paper over a leaky bucket.
Related Terms
Frequently Asked Questions
How do you calculate Gross Revenue Retention?
Gross Revenue Retention is calculated using the formula: GRR = (Starting MRR - Churned MRR - Contraction MRR) / Starting MRR x 100%. The percentage of recurring revenue retained from existing customers over a period, excluding any expansion revenue from upsells — measures pure churn.
What is a good Gross Revenue Retention?
What constitutes a "good" Gross Revenue Retention depends on context — the fund's stage, vintage year, and strategy. Check our benchmarks and calculators for specific ranges.