Net Revenue Retention (NRR) is a metric that shows how much recurring revenue you keep (and grow) from your existing customers over time — after factoring in upgrades, downgrades, and churn.
It tells you whether your current customers are spending more, less, or the same with you over time. A strong NRR means you’re not just holding on to customers — you’re growing revenue from them.
It’s especially important for SaaS and subscription-based businesses, where long-term customer value matters more than one-off sales.
Simple formula:
NRR = (Starting MRR + Expansion – Downgrades – Churn) / Starting MRR
Example:
Let’s say you start the month with €100,000 in Monthly Recurring Revenue (MRR) from existing customers. During that month:
- €10,000 comes from upsells (expansion)
- €5,000 is lost to downgrades
- €5,000 is lost to cancellations (churn)
Then your NRR would be:
(100K + 10K – 5K – 5K) / 100K = 100%
That means you’ve fully retained your revenue from existing customers. If your NRR was 120%, it would mean your current customers are spending more than before — which is a great sign of healthy growth.