What is a good net revenue retention rate?

Above 100% means your existing customers grow on their own, which is what investors pay up for. Under 90% means fix retention before spending more on acquisition.

Is NRR the same as net dollar retention?

Yes. NRR and NDR are two names for the same metric. Just state whether you compute it on MRR, ARR or revenue.

Can gross revenue retention be over 100%?

No. GRR ignores expansion, so the best possible GRR is 100%: nobody downgraded and nobody left.

Does NRR include new customers?

No. New customers acquired during the period are excluded. NRR only measures the customers you had at the start.

How do I turn monthly NRR into annual NRR?

Raise it to the twelfth power. 99% monthly becomes about 89% annually. Better still, measure a twelve-month cohort directly.

Net Revenue Retention (NRR): Formula, Benchmarks and NRR vs GRR

The formula

Net revenue retention

NRR = (Starting MRR + Expansion − Contraction − Churn) ÷ Starting MRR

Starting MRR: what the customers you had at the start of the period were paying then.
Expansion: upgrades, extra seats, higher usage from those same customers.
Contraction: downgrades and fewer seats.
Churn: the MRR of customers who left.

New customers signed during the period are excluded. Always. NRR measures the base you already had, nothing else. The usual window is twelve months.

A worked example

Example, fictional figures

Customers on 1 January: $100,000 MRR

Expansion over the year: +$18,000

Contraction: −$5,000

Churn: −$8,000

NRR = (100,000 + 18,000 − 5,000 − 8,000) ÷ 100,000 = 105%

GRR = (100,000 − 5,000 − 8,000) ÷ 100,000 = 87%

Growing without a single new logo. But 13% leaks out every year.

NRR vs GRR

Gross revenue retention

GRR = (Starting MRR − Contraction − Churn) ÷ Starting MRR

Gross revenue retention is the same calculation without expansion. It can never go above 100%. NRR tells me how good the upside is. GRR tells me how leaky the bucket is.

Look at both. A 110% NRR made of 25 points of expansion and an 85% GRR is a different company from a 110% NRR made of 13 points of expansion and a 97% GRR. Same headline. The first is pouring water into a leaky bucket faster than it leaks. For now.

NRR vs net dollar retention

Same thing. Net dollar retention (NDR) and net revenue retention are used interchangeably. Some companies compute it on MRR, some on ARR, some on recognized revenue. Pick one and never switch quarter to quarter.

What a good NRR looks like

NRR	How I read it
Under 90%	Leaky. Fix retention before you buy more customers.
90% to 100%	Holding. Expansion covers part of the leak.
100% to 120%	Strong. The base grows on its own.
Over 120%	Exceptional. Usually seat or usage pricing, larger customers.

Rules of thumb, not laws.

Who you sell to matters. Small businesses close, downsize and switch tools more often than enterprises, so SMB products usually run lower NRR than enterprise ones. Compare yourself with companies selling to the same buyer.

Four ways NRR gets flattered

New customers counted as expansion. A new subsidiary of an existing customer? Fine. A brand new customer in the same industry? Not expansion.
Monthly NRR quoted as if it were annual. 99% a month sounds fine. Compounded over twelve months it is about 89%.
Logos and dollars mixed up. Lose twenty small customers and grow one big one, and NRR can sit above 100% while logo retention falls off a cliff. Report both.
Cherry-picked cohorts. Quoting the best cohort as the company number. Use every customer who was there at the start.

NRR comes free with the MRR bridge

An MRR bridge is starting MRR, plus new, plus expansion, minus contraction, minus churn, equals ending MRR. Take the new-customer bar out and you have NRR. If you already build the bridge every month, you are one division away.

That bridge is the first page of George's monthly review. When churn moves, he asks who left and why before anyone talks about new sales. If NRR drops, the burn multiple and CAC payback usually follow.