Net Revenue Retention (NRR)

Net Revenue Retention (NRR), also called Net Dollar Retention (NDR), measures how much recurring revenue you retain and grow from your existing customer base, excluding any revenue from new customers. It captures the combined impact of churn, contraction, and expansion.

An NRR above 100% means your existing customers are generating more revenue than they were a year ago—a powerful signal that your product delivers increasing value. Best-in-class SaaS companies achieve NRR rates of 120–140% or higher.

NRR is calculated by taking the starting MRR from a cohort of customers, adding expansion MRR, subtracting contraction MRR and churn MRR, then dividing by the starting MRR and multiplying by 100.

NRR is arguably the most important metric for a SaaS business because it shows whether the product is a "leaky bucket" or a compounding growth engine. Companies with high NRR can grow even without acquiring new customers. Customer experience programs directly impact NRR by reducing churn, minimizing contraction, and enabling expansion through advocacy and product adoption.