What is Net Revenue Retention (NRR)?
Net Revenue Retention (NRR), also called Net Dollar Retention (NDR), measures the percentage of recurring revenue retained from existing customers over a period, including expansion, contraction, and churn.
NRR is calculated as: (Starting MRR + Expansion - Contraction - Churn) ÷ Starting MRR × 100.
An NRR above 100% means your existing customers are spending more over time — you're growing even without new customers. Elite SaaS companies achieve 120-150% NRR. Snowflake famously reported 158% NRR. Below 100% means your customer base is shrinking.
NRR is the single best predictor of SaaS company valuation. Companies with 130%+ NRR trade at 2-3x higher multiples than companies with 90% NRR, even with similar growth rates.
Why It Matters
NRR is the #1 metric investors look at for SaaS companies. It measures product stickiness, expansion potential, and customer satisfaction in a single number. If your NRR is below 100%, you have a leaky bucket.
Frequently Asked Questions
What is a good NRR for SaaS?
Below 90%: Concerning. 90-100%: Average. 100-120%: Good. 120-140%: Excellent. 140%+: Elite (think Snowflake, Datadog).
What is the difference between NRR and GRR?
NRR includes expansion revenue (upgrades). Gross Revenue Retention (GRR) excludes expansion and only measures churn + contraction. GRR can never exceed 100%.
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Richard Ewing is a Product Economist and AI Capital Auditor. He helps companies translate technical complexity into financial clarity.
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