What is Net Revenue Retention (NRR)?
The percentage of recurring revenue retained from existing customers over a period, including expansion, contraction, and churn.
Definition
Net revenue retention measures how much revenue you keep and grow from your existing customer base without counting new customer acquisition. It starts with your beginning-period recurring revenue and factors in upgrades (expansion), downgrades (contraction), and cancellations (churn). An NRR above 100% means your existing customers are spending more over time, even before adding new logos.
Why It Matters
NRR is the single best metric for evaluating the health of a SaaS or subscription business. Companies with NRR above 120% can grow even with zero new customer acquisition. Investors obsess over it because high NRR indicates strong product-market fit, effective upselling, and low churn. In B2B data tools specifically, NRR signals whether a tool becomes more embedded (and more valuable) over time or whether customers outgrow it.
Example
A B2B data company starts Q1 with $1M in ARR from existing customers. During Q1, $80K in expansions (upgrades, additional seats), $20K in contractions (downgrades), and $30K in churned revenue. NRR = ($1M + $80K - $20K - $30K) / $1M = 103%. The existing customer base grew 3% without adding a single new customer.