Revenue Metrics

NRR: Net Revenue Retention

Revenue retained from the existing customer base, including expansion, after churn and contraction.

Definition

Net Revenue Retention (NRR), sometimes Net Dollar Retention (NDR) in US contexts, measures the percentage of revenue retained from an existing customer cohort over a period, including expansion, contraction and churn. NRR above 100% means existing customers pay more over time even with zero net new sales.

Formula

NRR = (Starting Revenue + Expansion − Contraction − Churn) ÷ Starting Revenue × 100

NRR = (Start Revenue + Expansion − Contraction − Churn) / Start Revenue × 100%

Worked example

Start the year at £1m ARR from existing customers. Expansion adds £200k, contraction removes £30k, churn removes £20k. NRR = (1,000,000 + 200,000 − 30,000 − 20,000) / 1,000,000 = 115%.

Why it matters

NRR is the single most predictive metric for a mature recurring revenue business. An NRR of 120% means the business could fire its entire new business team and still grow 20% next year. Top quartile public SaaS companies sit at 120-130% NRR.

Common mistakes

  • Confusing NRR with Gross Retention (which excludes expansion)
  • Measuring NRR on a logo basis rather than a revenue basis
  • Cherry-picking the cohort definition to flatter the number

Related terms

GRRChurnARRMRR

Read more in The Guide

Chapter: Metrics That Matter →

Sources & further reading

  • — Drawn from Evara's working definitions used on retained search and revenue advisory engagements (2024–2026).
  • — Reconciled against industry conventions in SaaStr, OpenView SaaS Benchmarks and Bessemer State of the Cloud.
  • — Reviewed by Rich Evans, Strategic Advisor at Evara and former operator/founder.

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