Gross revenue retention measures how much recurring revenue you keep from existing customers over a year, counting only churn and downgrades and ignoring expansion.
Key takeaways
Gross revenue retention measures how much recurring revenue you keep from existing customers over a year, counting only churn and downgrades and ignoring expansion. It caps at 100%, so it strips out upsell and exposes your true retention floor. It's the cleanest read on churn health.
Formula
GRR = (Starting ARR − Contraction − Churn) ÷ Starting ARR
Start with $2M ARR, lose $80K to downgrades and $180K to churn. GRR = ($2M − $80K − $180K) ÷ $2M = 87%. Expansion never enters the calculation, so GRR can't exceed 100%.
Median GRR is ~90%; bootstrapped SaaS at $3–20M ARR shows a median of 92% per SaaS Capital; below 85% flags product or CS issues.
Source: SaaS Capital (2025)
GRR is where investors look first because expansion can mask a churn problem in NRR. A high NRR with low GRR means a few whales are carrying a leaky base, which is fragile if one account leaves. Strong GRR proves product-market fit is sticky.