Also called: NRR · NDR
Net revenue retention (NRR), also called net dollar retention (NDR), measures revenue change within an existing customer base over a period, expansion, contraction, and churn combined, expressed as a percentage of where that same revenue started.
NRR starts with the ARR from a specific cohort of existing customers at the beginning of a period, then tracks what that exact same cohort is worth at the end of it. Expansion revenue, upsells, added seats, a move to a higher tier, gets added. Contraction and churn get subtracted. New-logo revenue never enters the calculation at all. Divide the ending figure by the starting figure and the result is NRR. A number above 100% means the existing base is growing on its own, expansion outpacing churn and contraction, before a single new customer gets signed.
Excluding new-logo revenue is what makes NRR useful. It isolates whether existing relationships are getting healthier or eroding, a signal that new-business bookings can mask completely. A company can post strong headline growth off pure new-logo volume while its existing base quietly shrinks underneath it, and NRR is the number built specifically to catch that.
NRR has no ceiling, unlike its churn-only counterpart, gross revenue retention. A cohort where expansion revenue outpaces churn and contraction can post NRR well above 100%, and that's the entire premise behind a land-and-expand motion: the initial deal is scoped small on purpose, with renewals and upsells expected to carry most of the account's long-term value.
Read NRR next to GRR rather than alone. A wide gap between the two means expansion revenue is doing a lot of work to offset real churn happening underneath, which is a different risk profile than strong retention on both metrics at once.
A single blended NRR figure across the whole customer base can hide a lot. A cohort of large accounts posting strong expansion can mask a smaller-account segment churning heavily, and the two problems need very different fixes.
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