B2B SaaS Fundamentals
What is Net Revenue Retention (NRR)?
Net Revenue Retention (NRR) measures the percentage of recurring revenue retained from existing customers over a period, including expansion and net of churn and downgrades — a core health metric for subscription businesses.
Who Is It For?
NRR is tracked closely by RevOps and executive leadership, since it reflects the underlying health of the existing customer base.
How Is It Used?
It’s used to judge whether a business is expanding or contracting within its existing customer base, independent of new customer acquisition.
- Calculate NRR as starting revenue plus expansion minus churn and downgrades, divided by starting revenue
- Track NRR trends over time as a leading indicator of business health
- Segment NRR by customer cohort or plan tier to spot patterns
- Compare NRR against gross churn to understand how much expansion is offsetting losses
Related Terms & Concepts
Frequently Asked Questions
What’s a good NRR for B2B SaaS?
Many top-performing B2B SaaS companies target NRR above 100%, meaning expansion revenue more than offsets churn, though healthy benchmarks vary by segment and company stage.
Can NRR be above 100%?
Yes — if expansion revenue from upsells and upgrades exceeds revenue lost to churn and downgrades, NRR exceeds 100%, meaning the existing customer base is growing on its own.
