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.
- 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
Frequently Asked Questions
What is considered good net revenue retention?
For B2B SaaS, NRR above 100% is good, above 110% is strong, and above 120% is world-class. B2C companies typically have lower NRR because consumer spending patterns are less sticky.
How does NRR differ from gross retention?
Gross retention only accounts for contraction and churn, ignoring expansion. It is always 100% or below. NRR includes expansion revenue, so it can exceed 100%. Both are valuable: gross retention shows the floor, NRR shows the full picture.
Learn More
Guide
Understanding SaaS Metrics
A comprehensive guide to SaaS metrics including MRR, ARR, churn rate, LTV, CAC, and the Rule of 40. Learn what to track and how to benchmark your SaaS business.
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