How to Calculate NRR: Net Revenue Retention Formula and Benchmarks
Net Revenue Retention (NRR) measures how much revenue you retain and grow from existing customers. Here's the formula, what world-class looks like, and how to improve it.
Quick Answer
Net Revenue Retention (NRR) measures how much revenue you retain and grow from existing customers. Here's the formula, what world-class looks like, and how to improve it.
Net Revenue Retention (NRR) — also called Net Dollar Retention (NDR) — is the single metric that best predicts the long-term health of a SaaS business. It measures how much revenue you retain and grow from your existing customer base, without counting any new logo revenue.
A high NRR means your existing customers are expanding faster than they're churning. Above 100%, your revenue base grows even if you never win another customer. That's the compounding advantage that makes top-tier SaaS businesses so valuable.
What Is NRR?
NRR captures the net change in revenue from your existing customer cohort over a period, typically one month or one year. It accounts for:
- Contraction — customers downgrading to lower tiers
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