Net Revenue Retention (NRR)
Definition
Net revenue retention (also net dollar retention, NDR) measures how recurring revenue from a fixed cohort of existing customers changes over a year: starting ARR from those customers, plus expansion (upsells, seat growth, price increases), minus contraction and churn, divided by the starting ARR. New-customer revenue is excluded.
NRR above 100% means the existing base grows by itself — the business would expand even with zero new logos. Best-in-class enterprise SaaS companies have historically posted NRR of 120%+ (usage-based leaders at times higher), while ~100% or below suggests churn offsets expansion; benchmarks shift with the macro cycle and by customer segment (SMB churns more than enterprise).
Gross revenue retention (GRR) is the companion metric that caps at 100% by excluding expansion — it isolates pure churn.
Why interviewers ask
A favorite TMT and growth-equity question: 'what does 115% NRR tell you, and how is it different from gross retention?' NRR quality heavily influences software valuation multiples, and interviewers use it to test whether you can decompose growth into new-logo vs expansion and judge revenue durability.
Related terms
Interviews don't test definitions — they test recall under pressure.
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