Net revenue retention
Also known as: NRR, Dollar retention
Revenue from the cohort at the end of the period divided by revenue from the same cohort at the start. Includes expansion + churn.
NRR is the metric that separates healthy subscription businesses from treadmill ones. NRR above 100% means your existing customers generate more revenue each month than they did at signup (through upgrades, add-ons, seat growth) — you grow even without new customers. Best-in-class SaaS NRR is 110–130%; WooCommerce replenishment stores often hit 95–105% via upsells and box size upgrades.
Formula
NRR = (starting_mrr + expansion - churn - contraction) / starting_mrr
Worked example
A cohort of March-2024 subscribers generated $10,000 MRR at signup. One year later, the same cohort generates $9,400 MRR ($1,100 from expansion upgrades, $1,700 from churn and downgrades). NRR = ($10,000 + $1,100 - $1,700) / $10,000 = 94%.
Related terms
- MRR (monthly recurring revenue)- The monthly-normalised recurring revenue of a subscription business at a point in time.
- Churn rate- The percentage of subscribers who cancel in a given period. Usually reported as a monthly percentage.
- Cohort retention- The percentage of customers who joined in the same period (usually month) that are still active N months later.
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