Net revenue retention (NRR)
Net revenue retention (NRR), also called net dollar retention, measures how much recurring revenue a fixed cohort of customers produces at the end of a period versus the start, counting upgrades (expansion) and subtracting downgrades (contraction) and churn — but excluding revenue from brand-new customers. Above 100% means the cohort grew on its own. It is a subscription-economics convention, and definitions vary by vendor.
What this means
Net revenue retention = (starting recurring revenue of a cohort + expansion − contraction − churn) ÷ starting recurring revenue, for the same set of customers measured at the start. Expansion is upgrades, seat growth, or cross-sell within the cohort; contraction is downgrades; churn is revenue from customers who left. Crucially, the numerator excludes revenue from customers acquired during the period — NRR asks only what the original cohort did.
Why conventions vary
There is no single official authority for NRR, and vendors differ on the window (monthly vs annual), whether to measure MRR or ARR, and how to treat reactivations or one-time fees. Some report 'gross' figures that exclude expansion. Because the construction varies, an NRR quoted by one company is not strictly comparable to another's unless the definitions match. Read it alongside gross revenue retention to separate raw stickiness from expansion.
This page is educational and not financial advice.
- (Start + expansion − contraction − churn) ÷ start, same cohort
- Excludes revenue from newly acquired customers
- Above 100% means the existing base grew on its own
How it appears in analytics and logs
NRR above 100% means expansion outweighs churn and contraction in the existing base; below 100% means the base is leaking faster than it grows. Because it excludes new customers, it isolates how well current customers are kept and grown.
Diagnostic use case
Track whether an existing customer base grows or shrinks on its own, by comparing a cohort's recurring revenue across a period including expansion and net of churn.
What WebmasterID can help detect
WebmasterID measures product engagement and conversion signals first-party; combined with billing data, it helps ground the expansion and churn inputs to NRR without third-party identifiers.
Common mistakes
- Including new-customer revenue in the numerator.
- Comparing NRR across companies that define the window differently.
- Confusing net retention with gross retention (which excludes expansion).
Privacy and accuracy notes
NRR is an aggregate of recurring-revenue movements within a customer cohort. It involves no personal data, and this page is educational, not financial advice.
Related pages
- Gross revenue retention (GRR)
Gross revenue retention (GRR) measures how much of a cohort's recurring revenue survives churn and downgrades over a period, with expansion excluded. Because upgrades cannot count, GRR is capped at 100% — it can only stay flat or fall. It isolates raw stickiness, separate from a company's ability to upsell. GRR is a subscription convention and the exact construction varies by vendor.
- Expansion revenue (upsell MRR)
Expansion revenue is the additional recurring revenue earned from existing customers within a period — through plan upgrades, added seats, usage growth, or cross-sell — without acquiring anyone new. It is the positive component that lifts net revenue retention above gross. Isolating it cleanly from new-customer and reactivation revenue is the main measurement challenge, and the categorization is a vendor convention.
- Monthly recurring revenue (MRR)
Monthly recurring revenue (MRR) is the normalized, predictable subscription revenue a business expects each month. Annual and multi-month plans are divided down to a monthly figure so the run rate is comparable. MRR is decomposed into new, expansion, contraction, and churned components, and it deliberately excludes one-off and usage-based charges — so it is a run-rate concept, not booked or recognized revenue.
- Web analytics
Ground subscription signals in first-party data.
Sources and verification notes
- U.S. SEC — investor guide to financial statementsBackground on revenue recognition; NRR itself is a subscription-economics convention with no single official definition.
Last reviewed 2026-06-24. Facts are checked against primary/official sources where available; uncertain specifics are marked “Data not yet verified” rather than guessed.