What is a good net revenue retention rate?

Above 100% means the existing base grows on its own. Published benchmarks vary so widely by segment, contract length and how each company defines the cohort that comparing your figure to them is not informative — comparing it to your own prior periods is.

What is the difference between NRR and GRR?

Gross revenue retention excludes expansion, so it cannot exceed 100% and measures only what you lost. NRR includes expansion. Reporting both is the only way to tell whether a strong NRR reflects healthy retention or expansion masking churn.

Should new customers be included in NRR?

No. Including customers acquired during the period measures growth, not retention. The cohort is fixed at the start of the period and followed forward.

Why do two teams calculate different NRR?

Almost always the cohort definition or the period boundary. Monthly versus annual cohorts, contract value versus recognised revenue, and whether downgrades at renewal count as contraction or churn all produce materially different numbers from the same data.

Net Revenue Retention (NRR)

Revenue retained from an existing cohort over a period including expansion, expressed as a percentage of where that cohort started. The clearest single indicator of whether the base grows without new customers.

The calculation

Take a cohort's revenue at the start of a period. Add expansion, subtract contraction and churn from that same cohort. Divide by the starting figure. New customers acquired during the period are excluded — including them measures growth, not retention.

Reading it

Above 100% means the base grows on its own: expansion more than replaces what is lost. Below 100% means acquisition is filling a leaking bucket, and acquiring faster compounds the problem rather than solving it.

The averaging problem

Strong expansion in a few large accounts can mask widespread churn among small ones. A single figure above 100% is consistent with losing most of your customers. Segment before drawing any conclusion.

Three choices that change the answer

NRR is arithmetic, but the arithmetic sits on three definitional choices that are rarely written down. Two teams computing NRR from the same database routinely disagree, and it is almost never a calculation error.

Where the disagreement comes from

Choice	Options	Effect
Cohort window	Monthly, quarterly or annual	Shorter windows understate expansion that takes time
Revenue basis	Contract value or recognised revenue	Diverge whenever billing and delivery differ
Downgrade at renewal	Contraction or partial churn	Moves the same event between two lines

Source: Distinctions stated here

Computing it defensibly

Fix the cohort explicitly: every customer with revenue at the period start, listed by account ID. Write the list down — it is the artefact that makes the number reproducible.
Take that same list's revenue at period end, ignoring anyone not on it.
Divide. That is the headline figure.
Repeat by segment — size, plan, acquisition channel, tenure. The segment view is the one that supports a decision.
Report gross revenue retention beside it, always. NRR alone cannot distinguish a healthy base from expansion covering churn.

Where it misleads

In a business with few, large customers the figure is dominated by one or two accounts and is closer to anecdote than to a metric.
Seat-based pricing makes NRR partly a measure of the customer's headcount, which moves for reasons unrelated to your product.
A price increase raises NRR without any improvement in retention or usage. Track list-price changes alongside it or the metric quietly becomes a pricing report.
Early-stage cohorts are small enough that ordinary variance looks like a trend.

RELATED TERMS

Gross Revenue Retention (GRR)

Revenue retained from an existing cohort excluding expansion. Caps at 100% and measures only what was lost.

Expansion Revenue

Additional recurring revenue from existing customers: more seats, higher tiers, additional products or increased usage.

Logo Retention

The proportion of customers retained by count rather than by value.

Churn

Customers or revenue lost over a period. The leak determining whether acquisition compounds or merely replaces.

COMMON QUESTIONS

What is a good net revenue retention rate?: Above 100% means the existing base grows on its own. Published benchmarks vary so widely by segment, contract length and how each company defines the cohort that comparing your figure to them is not informative — comparing it to your own prior periods is.
What is the difference between NRR and GRR?: Gross revenue retention excludes expansion, so it cannot exceed 100% and measures only what you lost. NRR includes expansion. Reporting both is the only way to tell whether a strong NRR reflects healthy retention or expansion masking churn.
Should new customers be included in NRR?: No. Including customers acquired during the period measures growth, not retention. The cohort is fixed at the start of the period and followed forward.
Why do two teams calculate different NRR?: Almost always the cohort definition or the period boundary. Monthly versus annual cohorts, contract value versus recognised revenue, and whether downgrades at renewal count as contraction or churn all produce materially different numbers from the same data.