Net revenue retention (NRR) is the percentage of recurring revenue a company keeps from its existing customers over a period, after churn, downgrades and expansion are counted.
The formula, and what NRR can hide
Take starting recurring revenue, subtract what churn and downgrades took away, add what upgrades brought in, then divide by the starting figure and multiply by 100. New customers stay out of it. Above 100% means the existing base grew on its own. Gross revenue retention (GRR) is the same sum without the upgrades, so it can never pass 100%.
Read the two together. As Stripe puts it, a high NRR "can sometimes mask a retention problem", because strong expansion in a few accounts can cover losses in many. For account managers, NRR is the scoreboard. It moves in the QBR, on the renewal call and in the expansion deal, all covered in our account expansion guide.
A worked month
In a worked example Stripe publishes, a company starts the month with $100,000 of recurring revenue from existing customers, loses $5,000 to churn and $2,000 to downgrades, and gains $8,000 from upgrades. NRR is ($100,000 minus $5,000 minus $2,000 plus $8,000) divided by $100,000, which is 101%. GRR for the same month is 93%. The team grew, and it also lost 7% of its starting revenue, which is the number to coach on at renewal.
The question a manager asks in a 1:1
On one account manager's book, the NRR figure alone tells a manager very little. Ask for the lines behind it: which accounts churned or downgraded, which expanded, and what each customer said beforehand. A book just over 100%, with all its growth from one account and its losses spread across five others, has a renewal problem that the headline hides. The manager takes the losing account with the nearest renewal and makes it this week's deal review, run as a call: what did the customer say they got from the product last quarter, and who at the customer would say it now?
A one-row version for the 1:1 sheet, filled in for the losing account (illustrative):
| Account | Change this period | What the customer said beforehand | Renewal | Next conversation |
|---|---|---|---|---|
| Account C | Downgrade, 40 seats to 25 | "Only the London team uses it" | 60 days | Ask the London lead what they got from it last quarter, then who else would say the same |
Related terms
- What is a QBR?: the meeting where value is confirmed and expansion threads start
- How to spot an account ready to expand: the signals behind the upgrade line
- How to coach account managers: the weekly review that moves the number
FAQ
How do you calculate net revenue retention? Take starting recurring revenue from existing customers, subtract revenue lost to churn and downgrades, add revenue from upgrades, divide by the starting figure and multiply by 100. Leave out revenue from customers who joined during the period.
What is the difference between NRR and GRR? NRR includes expansion revenue and GRR does not. GRR shows how much starting revenue you held on to, so it tops out at 100%. NRR adds upgrades on top, so a team can post NRR above 100% while still losing customers.
What moves net revenue retention? Three things move it: renewals held at full value, fewer downgrades, and expansion deals that close. Each one comes down to an account manager's conversation with a customer.