Revenue & RetentionNRR

Net Revenue Retention

NRR shows how much revenue you retain and expand from existing customers over a period, accounting for upgrades, downgrades, and churn.

Key Takeaways
  • NRR measures the percentage of recurring revenue retained from a cohort of customers over time, including expansion revenue from upgrades and add-ons, minus contractions and churn.
  • Common Mistakes:
  • Including new customer revenue in NRR (NRR measures existing customers only).
  • Using different time periods for starting and ending cohorts.
  • Counting one-time charges or professional services as expansion revenue.
  • Not accounting for partial-month effects when customers churn mid-period.
  • Confusing NRR with GRR (NRR includes expansion; GRR does not).
  • Calculating NRR on too small a sample size, leading to volatility.

Definition

NRR measures the percentage of recurring revenue retained from a cohort of customers over time, including expansion revenue from upgrades and add-ons, minus contractions and churn.

NRR > 100%

Expansion revenue exceeds churn and contractions—ideal for SaaS growth.

NRR = 100%

Flat revenue from existing customers; no net gain or loss.

NRR < 100%

Net revenue loss from the cohort; churn exceeds expansion.

Formula

NRR (%) = (Starting MRR + Expansion − Contraction − Churn) / Starting MRR × 100

Variables

Starting MRR

Revenue at the beginning of the period from the cohort.

Expansion

Additional revenue from upgrades, upsells, cross-sells.

Contraction

Lost revenue from downgrades or seat reductions.

Churn

Revenue lost from customers who canceled.

Examples

Monthly NRR calculation

CustomerJan MRRFeb MRRChange
A$500$650+$150 expansion
B$1,200$1,000−$200 contraction
C$800$0−$800 churned
D$300$300no change
  1. 1Starting MRR (Jan) = $500 + $1,200 + $800 + $300 = $2,800
  2. 2Expansion = $150, Contraction = $200, Churn = $800
  3. 3Ending MRR = $2,800 + $150 − $200 − $800 = $1,950
  4. 4NRR = $1,950 / $2,800 × 100 = 69.6%
→ NRR = 69.6%

Track in Daymark

Data Sources

CSVgoogle sheetspostgreSQL

Required Fields

MRR snapshots by period
  • customer_id
  • period_date
  • mrr_amount

Sample Questions

  • Calculate NRR for the last 12 months
  • Show monthly NRR trend with expansion and churn breakdown
  • What is NRR by customer cohort (month they joined)?
  • Compare NRR across different product tiers or segments
  • Show NRR for customers who started in Q1 2024
  • What's driving NRR—expansion or low churn?
  • Calculate rolling 3-month average NRR
Analyze your NRR

Dashboard Template

1. line
NRR trend

NRR percentage by month or quarter

2. waterfall
Revenue movement waterfall

Starting MRR, expansion, contraction, churn, ending MRR

3. heatmap
NRR by cohort

Cohort-based NRR over time

4. stacked bar
Expansion vs churn

Monthly expansion and churn amounts

Common Mistakes

  • •Including new customer revenue in NRR (NRR measures existing customers only).
  • •Using different time periods for starting and ending cohorts.
  • •Counting one-time charges or professional services as expansion revenue.
  • •Not accounting for partial-month effects when customers churn mid-period.
  • •Confusing NRR with GRR (NRR includes expansion; GRR does not).
  • •Calculating NRR on too small a sample size, leading to volatility.

FAQ

Q: What's a good NRR benchmark?

Top SaaS companies target NRR > 120%. Above 100% is healthy; below 100% indicates revenue leakage.

Q: Should I calculate NRR monthly or annually?

Monthly is more common and provides faster feedback, but use consistent periods for trending.

Q: What's the difference between NRR and GRR?

NRR includes expansion revenue; GRR excludes it and only measures retention without upsells.

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