Also known as NDR
Net revenue retention measures how much recurring revenue you keep from existing customers over a year, including expansion and after subtracting downgrades and churn.
Key takeaways
Net revenue retention measures how much recurring revenue you keep from existing customers over a year, including expansion and after subtracting downgrades and churn. Above 100% means your installed base grows on its own, before adding a single new logo. It's the clearest signal of durable, compounding SaaS growth.
Formula
NRR = (Starting ARR + Expansion − Contraction − Churn) ÷ Starting ARR
Start the year with $2M ARR from a cohort, add $360K expansion, lose $80K to downgrades and $180K to churn. NRR = ($2M + $360K − $80K − $180K) ÷ $2M = 105%.
Median venture-backed SaaS NRR is ~106%; Bessemer calls 100% good, 110% better, 120%+ best-in-class.
Source: SaaS Capital / Bessemer State of the Cloud (2025)
NRR above 100% means the business compounds even if new sales stall, which is exactly what seed and Series A investors underwrite in diligence. It also lets you grow revenue on lower burn, extending runway between rounds.