Net Revenue Retention (NRR) Calculator

Net Revenue Retention (NRR) shows how your recurring revenue from an existing customer or cohort changes over a period after accounting for upgrades, downgrades, and churn. This calculator lets you plug in a starting revenue base plus expansion, contraction, and churn to see both NRR and Gross Revenue Retention (GRR), so you can quickly assess the health of your SaaS growth engine.

What is Net Revenue Retention (NRR)?

Net Revenue Retention measures how much recurring revenue you retain and expand from an existing set of customers over a given period (month, quarter, or year). It ignores new customer acquisitions and focuses only on customers who were already in the cohort at the start of the period.

In plain language, NRR answers: “If I start the period with a certain amount of recurring revenue from a cohort, what does that revenue look like at the end after upsells, cross‑sells, downgrades, and churn?”

NRR formula

Using the inputs from this calculator, the standard formula is:

NRR = (Starting revenue + Expansion revenue − Contraction revenue − Churned revenue) ÷ Starting revenue

The same formula in MathML form is:

Where:

• S = Starting recurring revenue (ARR or MRR) from the cohort
• E = Expansion revenue (upsells, cross‑sells, price increases)
• C = Contraction revenue (downgrades, reduced seats, discounts)
• H = Churned revenue (lost customers or fully cancelled accounts)

NRR vs Gross Revenue Retention (GRR)

Gross Revenue Retention looks at retention before taking any expansion into account. It answers: “How much of my starting revenue did I keep if I ignore upsells and only consider downgrades and churn?”

Using the same inputs, the GRR formula is:

GRR = (Starting revenue − Contraction revenue − Churned revenue) ÷ Starting revenue

Comparison: NRR and GRR and related metrics

How to interpret your NRR and GRR results

Use the calculator results to understand whether your existing customer base is a growth driver or a drag on total ARR/MRR.

• NRR below 100%: Your cohort is shrinking. Expansion revenue is not enough to offset downgrades and churn. You will rely more heavily on new sales to grow.
• NRR around 100–110%: Your cohort is roughly stable or modestly expanding. This is common in early or mid‑stage SaaS and can be healthy if balanced with efficient acquisition.
• NRR 110–130%+: Your existing customers are driving significant growth through expansion. This is often considered best‑in‑class in B2B SaaS, though benchmarks vary by ACV, market, and stage.

GRR is typically lower than NRR because it excludes expansion:

• GRR of 80–90% is common in many B2B SaaS businesses.
• GRR above 90–95% indicates strong product‑market fit and low downgrades/churn for your segment.

Always interpret NRR and GRR together. Strong NRR with weak GRR can signal that you are expanding a small subset of customers while losing too many at the bottom. Healthy GRR with modest NRR may indicate room to build a stronger expansion motion.

Worked example

Suppose you are analyzing a 12‑month ARR cohort:

• Starting recurring revenue (S): $100,000 ARR from existing customers at the beginning of the year.
• Expansion revenue (E): $30,000 from upsells and cross‑sells to those same customers.
• Contraction revenue (C): $10,000 lost from downgrades and reduced usage.
• Churned revenue (H): $5,000 from customers who fully cancelled.

End‑of‑period revenue from the cohort is:

$100,000 + $30,000 − $10,000 − $5,000 = $115,000

NRR is:

NRR = $115,000 ÷ $100,000 = 115%

GRR ignores the $30,000 of expansion and only looks at downgrades and churn:

GRR = ($100,000 − $10,000 − $5,000) ÷ $100,000 = $85,000 ÷ $100,000 = 85%

In this scenario, you have very strong NRR (115%), driven by substantial expansion, but GRR (85%) shows that you are still losing a meaningful portion of your original revenue base to downgrades and churn. The calculator lets you plug similar numbers in for any period (monthly, quarterly, or annually) to see these dynamics clearly.

How to use this calculator correctly

• Pick a single period: Choose a consistent time frame such as one month, one quarter, or one year.
• Use either ARR or MRR, not both: If you analyze annual revenue, enter everything in ARR. If you analyze monthly revenue, enter everything in MRR.
• Use a single cohort: All inputs should come from the same starting customer set. Do not mix multiple unrelated cohorts in one calculation.
• Separate new business: New customers added during the period are not part of this cohort. Their revenue should not be included in any of the fields.

This discipline ensures that your NRR and GRR reflect true retention and expansion dynamics rather than being distorted by new logo growth.

Limitations and assumptions

This calculator follows common SaaS finance conventions, but it relies on several assumptions you should be aware of:

• Single currency and price level: It assumes revenue is in a single currency and comparable across the period. Significant FX swings or list‑price changes may require adjustments.
• No prorated mid‑period changes: Inputs typically use end‑of‑period ARR/MRR snapshots. If you want to model mid‑period upgrades or downgrades more precisely, you may need cohort‑level reporting from your billing or analytics tools.
• Excludes one‑time and usage‑only fees: The focus is on recurring revenue. Large, irregular one‑time charges can skew results if included.
• Segment differences: Benchmarks for “good” NRR or GRR vary widely by ACV, vertical, and sales motion. Enterprise SaaS can see 120%+ NRR, while SMB‑focused products may have lower but still healthy levels.
• Cohort definition is your responsibility: The calculator does not enforce how you define a cohort (by signup month, by segment, by region, etc.). Consistent definitions over time are important for trend analysis.

Use this tool as a quick way to quantify retention and expansion, then pair it with deeper cohort analyses in your CRM, data warehouse, or subscription analytics platform for strategic decisions.

NRR: The Metric That Explains “Good Growth”

SaaS companies talk about growth constantly, but not all growth is created equal. Growing because you are spending heavily on acquisition is very different from growing because existing customers are staying, upgrading, and expanding. Net Revenue Retention (NRR) is the metric that isolates that second kind of growth. It measures how much recurring revenue you keep and expand from an existing customer cohort over a defined period, excluding any new customers. If NRR is strong, your product is sticky, your pricing fits customer value, and your customer success motion is working. If NRR is weak, acquisition has to carry the whole company, which is expensive and risky.

NRR is widely used by investors and boards because it predicts long‑term scalability. Companies with NRR above 120% often grow efficiently and can justify aggressive acquisition. Companies below 90–100% may still succeed, but they must continually replace leaking revenue, which caps margins and makes forecasting harder. This calculator helps you compute NRR from basic ARR/MRR components and interpret what the number implies.

What Counts in NRR?

Choose a starting cohort—usually all customers who were active at the beginning of a month, quarter, or year. Track their revenue over the period and split changes into four buckets:

• Starting recurring revenue. The ARR or MRR from the cohort at period start.
• Expansion revenue. Upsells, seat growth, usage growth, cross‑sells that increase recurring revenue.
• Contraction revenue. Downgrades or reduced usage that lower recurring revenue but keep the customer.
• Churned revenue. Revenue lost from customers who cancel or fail to renew.

The Formula

NRR compares ending revenue for the cohort to starting revenue. The standard expression is:

Gross Revenue Retention (GRR) is similar but ignores expansion:

NRR and GRR together tell you whether your business is losing customers (low GRR), failing to expand (low NRR but decent GRR), or both.

Worked Example

Suppose at the start of a quarter your cohort produced $2,000,000 in ARR. Over the quarter:

• Existing customers upgraded for $320,000 of expansion ARR.
• Some customers downgraded, reducing ARR by $90,000.
• Churned customers removed $160,000 of ARR.

Ending cohort ARR is $2,000,000 + $320,000 − $90,000 − $160,000 = $2,070,000.

NRR is $2,070,000 / $2,000,000 = 1.035, or 103.5%. That means the cohort grew slightly even after churn. GRR is ($2,000,000 − $90,000 − $160,000) / $2,000,000 = 87.5%. Your product expands well, but churn and downgrades are still meaningful.

Benchmark Bands

NRR is context‑sensitive, but common bands are:

How to Improve NRR

NRR can improve through different levers:

1. Reduce churn. Fix onboarding gaps, product bugs, or pricing mismatch. Even a 1‑point churn improvement can move NRR dramatically.
2. Reduce contraction. Watch downgrade reasons; often they point to feature confusion or unmet outcomes.
3. Increase expansion. Improve activation, add usage‑based tiers, or deliver clearer ROI that motivates upgrading.

It can be helpful to see how these levers interact. For example, two products might both report 110% NRR, but one gets there through low churn and modest expansion, while the other relies on very high expansion to offset serious churn. The first profile is usually more resilient because expansion is easier when customers are already satisfied. The second profile can still work—some usage‑based products accept high logo churn—but it tends to be more volatile month to month.

NRR in Usage‑Based and Multi‑Product Businesses

If you sell usage‑based plans, expansion revenue may be tied to customer activity rather than explicit upgrades. In that case, NRR can rise sharply when customers succeed with your product and fall quickly during downturns. Many teams compute both a “reported NRR” (including usage expansion) and a “normalized NRR” that smooths extreme months. Multi‑product SaaS companies also benefit from NRR because cross‑sells show up as expansion; however, you should make sure cross‑sell revenue is attributed to the same starting cohort to avoid counting new logos as retention.

Common Reporting Mistakes

• Mixing cohorts. NRR must track the same customers over time. Adding new customers to the ending number inflates retention.
• Counting price increases as expansion without noting context. A one‑time across‑the‑board price rise can lift NRR temporarily but may not reflect product value.
• Using bookings instead of recurring revenue. NRR is about recurring revenue recognized for the cohort, not signed contract value.
• Ignoring currency effects. If you bill internationally, FX shifts can change ARR without any customer behavior change.

Segmenting NRR by customer size, industry, or acquisition channel is often more valuable than a single blended number. A blended NRR of 110% might hide an SMB segment at 80% and an enterprise segment at 140%.

Limitations and Assumptions

This calculator assumes you are using consistent cohort accounting over a single period. It does not:

• Model logo retention separately from revenue retention.
• Adjust for multi‑year contracts recognized annually.
• Handle seasonality; use the period that matches your reporting cadence.
• Replace cohort analytics for different segments.

If your contracts include large one‑time services or implementation fees, exclude those from inputs. NRR is intended to reflect recurring subscription value. Including non‑recurring revenue can make retention appear stronger than it really is.

Still, for most SaaS teams, the four‑bucket model here matches how NRR is reported in board decks and investor updates.