Net Revenue Retention (NRR)
Net Revenue Retention measures the percentage of recurring revenue retained from existing customers over a period, including expansion (upsells, cross-sells) and contraction (downgrades, churn). An NRR above 100% means your existing customer base is growing without any new sales.
Annual Revenue Recovered
From churn intervention systems at BatchService
Why Net Revenue Retention (NRR) Matters for SaaS Companies
NRR is the single most important metric for SaaS companies raising Series A or B. Investors use it as a proxy for product-market fit and pricing power. If your NRR is below 100%, you are running on a treadmill — every dollar of new revenue just replaces what you are losing. At 120%+ NRR, your existing customers alone grow revenue 20% year-over-year before your sales team closes a single new deal.
Formula
NRR = (Starting MRR + Expansion - Contraction - Churn) / Starting MRR x 100
Benchmark
Best-in-class B2B SaaS: 120%+. Good: 100-120%. Concerning: below 100%.
Tools for Measurement
An Operator's Take
At BatchService, our reported NRR looked healthy at 108%. When I dug into the numbers, I found we were counting one-time service revenue in the expansion bucket. Strip that out and real NRR was 94%. We were losing ground and the board deck said we were winning. The fix was not a dashboard problem — it was a churn problem disguised as a measurement problem. We built automated churn intervention workflows that caught at-risk accounts 30 days before cancellation. Real NRR went from 94% to 112% in two quarters.
Common Mistakes
What I see go wrong at Seed to Series B companies.
Including one-time revenue (services, implementation fees) in expansion calculations. NRR should only count recurring revenue.
Measuring NRR monthly but reporting it as an annual number without annualizing correctly. Monthly NRR of 99% is annual NRR of 89%.
Not segmenting NRR by cohort, plan, or customer size. Your enterprise NRR might be 130% while SMB is 75%. The blended number hides the real story.
Comparing your NRR to benchmarks without accounting for your contract structure. Monthly contracts churn differently than annual ones.
What to Do This Week
Concrete steps you can take right now.
Pull your last 12 months of MRR data. Calculate NRR excluding any one-time revenue. Compare to what you have been reporting.
Segment NRR by customer plan tier and cohort month. Find which segments are growing vs. shrinking.
Identify the top 5 accounts by revenue that churned in the last 6 months. For each one, document when they started showing risk signals and what you did about it.
If NRR is below 100%, use the Churn Calculator to quantify the annual revenue impact and model improvement scenarios.
Related Resources
Related Terms
Try These Tools
Further Reading
Frequently Asked Questions
What is a good NRR for B2B SaaS?
Best-in-class B2B SaaS companies achieve NRR of 120% or higher. Twilio reported 155%, Snowflake 158%. For Seed to Series B companies, 100-115% is solid. Below 100% means you are losing more revenue from existing customers than you are expanding, which is a red flag for investors.
What is the difference between NRR and GRR?
GRR (Gross Revenue Retention) only measures revenue lost to churn and downgrades — it cannot exceed 100%. NRR includes expansion revenue from upsells and cross-sells, so it can exceed 100%. GRR tells you how much revenue you are keeping. NRR tells you how much your existing base is worth over time. Both matter, but NRR is the metric investors focus on.
How do you improve NRR?
Two levers: reduce churn/contraction and increase expansion. For reducing churn, build automated health monitoring and intervention workflows. For expansion, implement usage-based pricing tiers, proactive upsell triggers based on usage data, and strategic pricing reviews. Most companies see faster results from reducing involuntary churn (failed payments, billing errors) because it requires systems, not sales.
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