Net Revenue Retention
Definition
NRR shows how recurring revenue from existing customers develops.
The ratio of recurring revenue of an existing customer cohort after expansion, downgrades, and cancellations to the starting revenue.
Simply explained
The same customer group is tracked, considering additional orders, reductions, and cancellations.
Why it matters in practice
Helps to manage marketing decisions measurably, comparably, and economically.
Example from business
A yearly cohort starts with 1 million euros ARR and ends after movements at 1.08 million; NRR is 108 percent.
Limits and pitfalls
- Including new customer revenue or confusing NRR with gross revenue retention.
Origin & history
NRR is an established SaaS metric; definition and period must be consistently set.
Use in mid-sized companies
- Possible application: Track recurring revenues of the same customer group over one year and evaluate their change excluding new customer revenues.
Frequently asked questions
What does Net Dollar Retention (NRR) mean?
The ratio of recurring revenue of an existing customer cohort after expansion, downgrades, and cancellations to the starting revenue.
Which mistakes should be avoided?
Including new customer revenue or confusing NRR with gross revenue retention.
Sources
Source checked on 10.10.2026. Editorial application examples are hypothetical; no evidence of real customer results.
Editorially reviewed on: