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Business TermNRR

ネットレベニューリテンション(NRR)

Net Revenue Retention (NRR) / ネット・レベニュー・リテンション

Net revenue retention (NRR) shows how much recurring revenue remains from existing customers after expansion, contraction, and churn. Above 100% means the existing base grows without new customers.

Formula
NRR = (starting MRR + Expansion MRR - Contraction MRR - Churn MRR) / starting MRR
Use when
Shows whether the existing customer base can grow without new sales.
Watch out
Starting customers, expansion, reactivation, contraction, churn
Updated: 2026. 05. 14.Quality: ReviewedSources: 3
What it means

Net revenue retention (NRR), also called net dollar retention in some contexts, measures how recurring revenue from starting customers changes during a period. It adds expansion and reactivation, subtracts contraction and churn, and excludes new-customer revenue. NRR reveals whether product value, customer success, packaging, and pricing can grow the existing base even before acquisition is counted.

How to calculate it

The basic formula starts with recurring revenue from existing customers, adds expansion, subtracts contraction and churn, and divides by starting recurring revenue. New business is excluded. Basic formula | NRR = (starting MRR + Expansion MRR - Contraction MRR - Churn MRR) / starting MRR | Measures existing-customer revenue retention Above 100% | Existing revenue grew | Expansion exceeded contraction and churn Below 100% | Existing revenue shrank | The base declines without new acquisition

LensFormula / treatmentWhen to use it
Basic formulaNRR = (starting MRR + Expansion MRR - Contraction MRR - Churn MRR) / starting MRRMeasures existing-customer revenue retention
Above 100%Existing revenue grewExpansion exceeded contraction and churn
Below 100%Existing revenue shrankThe base declines without new acquisition
What counts / what does not

NRR is an existing-customer metric. Adding new customers hides whether the installed base is healthy. Include | Starting customers, expansion, reactivation, contraction, churn | They describe the existing base Exclude | New customers acquired during the period, first-order ARR, one-time revenue | Acquisition and retention must stay separate Define carefully | Reactivation, usage-based revenue, account consolidation, plan migration, mid-period changes | Cohort treatment varies

ItemTreatmentWhy it matters
IncludeStarting customers, expansion, reactivation, contraction, churnThey describe the existing base
ExcludeNew customers acquired during the period, first-order ARR, one-time revenueAcquisition and retention must stay separate
Define carefullyReactivation, usage-based revenue, account consolidation, plan migration, mid-period changesCohort treatment varies
What moves the number

NRR improves through expansion, higher adoption, better packaging, and lower churn or contraction. Expansion | Seats, upgrades, and cross-sell increase revenue | Main path to NRR above 100% Contraction | Seat reductions or downgrades reduce revenue | Signals adoption or value gaps Churn | Existing customers cancel | Directly leaks ARR or MRR Customer success | Onboarding and QBRs improve adoption | Helps both expansion and retention

DriverMetric impactWhat to watch
ExpansionSeats, upgrades, and cross-sell increase revenueMain path to NRR above 100%
ContractionSeat reductions or downgrades reduce revenueSignals adoption or value gaps
ChurnExisting customers cancelDirectly leaks ARR or MRR
Customer successOnboarding and QBRs improve adoptionHelps both expansion and retention
When it helps

Shows whether the existing customer base can grow without new sales. Separates ARR growth driven by acquisition from growth driven by customer value. Guides investment across customer success, product expansion, packaging, and pricing.

  • Shows whether the existing customer base can grow without new sales.
  • Separates ARR growth driven by acquisition from growth driven by customer value.
  • Guides investment across customer success, product expansion, packaging, and pricing.
How to use it
  • NRR excludes new-customer revenue.
  • NRR above 100% means expansion exceeds contraction and churn.
  • Read GRR with NRR to see whether expansion is hiding retention weakness.
  • For enterprise SaaS, NRR is a key signal of growth quality.
  • NRR is a lagging indicator, so adoption and usage leading indicators still matter.
Decision cautions

High NRR can be real strength or a temporary artifact from a few large upsells. Inspect distribution and cohorts. NRR alone can hide weak GRR or logo retention. Including new customers turns NRR into a growth-rate proxy, not retention. A single large upsell can move aggregate NRR; check median and segment views.

  • NRR alone can hide weak GRR or logo retention.
  • Including new customers turns NRR into a growth-rate proxy, not retention.
  • A single large upsell can move aggregate NRR; check median and segment views.
Read with

Read NRR with ARR, MRR, churn, GRR, and LTV. ARR / MRR | Recurring revenue base | Shows where NRR affects the business Churn Rate | Customer or revenue loss | Breaks down NRR pressure GRR | Existing revenue retention before expansion | Reveals the downside without upsell LTV | Future customer value | Higher NRR usually supports higher LTV

MetricRoleWhy read together
ARR / MRRRecurring revenue baseShows where NRR affects the business
Churn RateCustomer or revenue lossBreaks down NRR pressure
GRRExisting revenue retention before expansionReveals the downside without upsell
LTVFuture customer valueHigher NRR usually supports higher LTV
Example

A SaaS company starts the quarter with an existing-customer MRR base set to one hundred units. During the quarter, expansion adds eighteen units, contraction removes seven units, and churn removes six units. NRR lands above one hundred percent, so the existing base grew, but GRR remains below ninety percent, meaning expansion is covering meaningful leakage. The team keeps the upsell motion but also targets the segment driving contraction.

Compare with

NRR | Existing revenue retained after expansion and losses | Shows growth from the installed base GRR | Existing revenue retained before expansion | Shows retention downside directly Churn Rate | Customers or revenue lost | Explains negative pressure on NRR ARR | Total annual recurring revenue | NRR explains quality of ARR growth Logo retention | Customers retained by count | Does not show contract-size movement

MetricDifferenceWhy read together
NRRExisting revenue retained after expansion and lossesShows growth from the installed base
GRRExisting revenue retained before expansionShows retention downside directly
Churn RateCustomers or revenue lostExplains negative pressure on NRR
ARRTotal annual recurring revenueNRR explains quality of ARR growth
Logo retentionCustomers retained by countDoes not show contract-size movement
Common mistakes
  • NRR is the same as revenue growth. It excludes new customers and focuses on the starting customer base.
  • NRR above 100% means everything is healthy. Weak GRR or logo churn can still be hidden by expansion.
  • NRR is only a customer success metric. Product value, pricing, packaging, and sales expectations all affect it.
Frequently asked questions
Does NRR include new customer revenue?

No. NRR tracks the revenue change from customers who existed at the start of the period.

How is NRR different from GRR?

NRR includes expansion. GRR excludes expansion and shows how much revenue remains before upsell offsets losses.

Is NRR above 100% always enough?

No. Check whether it is broad-based, whether GRR is healthy, and whether logo retention is weakening.

Sources
SourcesKindLink
OpenStax: Principles of MarketingTier-S open textbookOpen
Wikipedia: Customer retentionRetention referenceOpen
Wikipedia: Revenue streamRecurring revenue referenceOpen