How to Calculate Net Revenue Retention (NRR)

If you are running a B2B SaaS company, Net Revenue Retention (NRR) is arguably the most important metric you can track. It measures the percentage of recurring revenue retained from existing customers over a specific period, including upgrades, downgrades, and cancellations.

The NRR Formula

Calculating NRR is simple once you have the right variables:

NRR = (Starting MRR + Expansion MRR - Downgrade MRR - Churn MRR) / Starting MRR

Example Calculation

Imagine you start the month with $100,000 in MRR.

• Expansion MRR: $5,000 (Customers upgrading their plans)
• Downgrade MRR: $2,000 (Customers moving to cheaper plans)
• Churn MRR: $3,000 (Customers who canceled completely)

Your NRR would be: ($100,000 + $5,000 - $2,000 - $3,000) / $100,000 = 100%

An NRR of 100% means your growth from existing customers perfectly offsets your losses.

What is a "Good" NRR?

• SMB SaaS: ~100%
• Mid-Market SaaS: ~110%
• Enterprise SaaS: 120%+

If your NRR is dropping below 100%, it means your bucket is leaking faster than you can fill it. This is exactly why you need a predictive tool like RetainPilot to spot churn risks before they happen.