Net Revenue Retention Calculator Formula
Understand the math behind the net revenue retention calculator. Each variable explained with a worked example.
Formulas Used
Net Revenue Retention
nrr = starting_mrr > 0 ? ((starting_mrr + expansion_mrr - contraction_mrr - churned_mrr) / starting_mrr) * 100 : 0Ending MRR from Existing Customers
ending_mrr = starting_mrr + expansion_mrr - contraction_mrr - churned_mrrNet MRR Change
net_change = expansion_mrr - contraction_mrr - churned_mrrVariables
| Variable | Description | Default |
|---|---|---|
starting_mrr | Starting MRR from Existing Customers(USD) | 100000 |
expansion_mrr | Expansion MRR (upgrades & add-ons)(USD) | 15000 |
contraction_mrr | Contraction MRR (downgrades)(USD) | 5000 |
churned_mrr | Churned MRR (cancellations)(USD) | 8000 |
How It Works
How to Calculate Net Revenue Retention
Formula
NRR = (Starting MRR + Expansion - Contraction - Churn) / Starting MRR x 100
NRR measures how much your existing customer revenue grows or shrinks, excluding new customer acquisitions. An NRR above 100% means existing customers spend more over time, which is the hallmark of elite SaaS companies. Top-performing B2B SaaS businesses achieve NRR between 110% and 140%.
Worked Example
A SaaS company starts with $100,000 MRR from existing customers. Expansions add $15,000, downgrades remove $5,000, and cancellations lose $8,000.
starting_mrr = 100000expansion_mrr = 15000contraction_mrr = 5000churned_mrr = 8000
- 01Ending MRR = $100,000 + $15,000 - $5,000 - $8,000 = $102,000
- 02NRR = ($102,000 / $100,000) x 100 = 102%
- 03Net Change = $15,000 - $5,000 - $8,000 = +$2,000
Ready to run the numbers?
Open Net Revenue Retention Calculator