Net Revenue Retention (NRR)
Definition
Net Revenue Retention measures revenue growth from existing customers. Includes expansions minus churn. Above 100% means you grow without new customers.
Extended Definition
Formula: NRR = ((Starting ARR + Expansion - Churn - Contraction) / Starting ARR) x 100. Example: start year with $1M ARR from cohort, lose $100k to churn, gain $300k from expansions. NRR = $1.2M / $1M = 120%. Best SaaS companies have NRR over 120%. Below 100% means you are shrinking existing accounts faster than expanding them.
Related Terms
ARR (Annual Recurring Revenue)
ARR is the yearly value of recurring subscription revenue. It's MRR × 12, normalized to show annual run rate. SaaS investors care about ARR more than MRR at scale.
Churn Rate
Churn rate is the percentage of customers who cancel their subscription in a given period. It's the silent killer of SaaS businesses—you can't grow faster than you're losing customers.
Land and Expand
Land and expand is a sales strategy where you start with a small deal, then grow revenue over time through upsells and cross-sells within the same account.