Definition
Net Revenue Retention
Net revenue retention (NRR) measures how recurring revenue from existing customers changes over a year, after upsells, downgrades and churn.
NRR tracks the revenue from a cohort of existing customers a year later, including expansions and upsells but net of downgrades and cancellations. An NRR above 100% means the company grows revenue from its existing base even without adding new customers — a powerful signal in SaaS.
Investors prize high NRR because it shows the product becomes more valuable to customers over time and that growth is not solely dependent on costly new acquisition. It complements churn and ARR as a core SaaS metric.
Related terms
- Churn RateChurn rate is the percentage of customers or revenue a company loses over a given period.
- Annual Recurring Revenue (ARR)ARR is the predictable, recurring revenue a subscription business expects to earn over a year from its contracts.
- Unit EconomicsUnit economics is the analysis of the revenue and costs associated with a single unit — typically one customer or one transaction.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.