What is Net Revenue Retention (NRR)?
Net revenue retention measures how much revenue a company retains and expands from its existing customer base over a period, including upsells, downgrades, and churn.
NRR (also called net dollar retention or NDR) tracks whether existing customers are spending more or less over time. An NRR above 100% means expansion revenue from existing customers exceeds losses from churn and downgrades — meaning the company grows even without new customer acquisition.
How to Calculate NRR
NRR = (Starting ARR + Expansion - Contraction - Churn) ÷ Starting ARR × 100. For example: $10M starting ARR + $2M expansion - $500K contraction - $500K churn = $11M ÷ $10M = 110% NRR. Best-in-class SaaS companies target 120%+ NRR.
Why CROs Care About NRR
NRR is often the single most important metric for CROs at growth-stage companies. High NRR means the company can grow revenue without proportionally increasing sales headcount. Boards evaluate CRO performance on NRR because it reflects the health of the entire customer lifecycle — not just new logo acquisition.
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