---
title: "What Is Net Revenue Retention (NRR)? Definition | ONEGTMLAB"
description: "Net revenue retention (NRR) measures how much recurring revenue a company keeps and grows from existing customers. Learn the NRR formula and its meaning."
canonical: https://www.onegtmlab.dev/glossary/net-revenue-retention
---

# What Is Net Revenue Retention (NRR)? Definition | ONEGTMLAB

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GTM Glossary

# Net Revenue Retention (NRR)

Net revenue retention (NRR) is the percentage of recurring revenue a company keeps from an existing group of customers over a period, after adding expansion and subtracting downgrades and churn.

Also called: NRR, net dollar retention, NDR

## Why it matters

NRR shows whether existing customers become more or less valuable over time. Above 100 percent means expansion from upgrades and added seats outweighs the revenue lost to downgrades and cancellations, so the business grows even before it signs a new customer. Below 100 percent means the customer base shrinks unless new sales make up the gap.

The usual formula takes recurring revenue from a group of customers at the start of a period, adds their expansion, subtracts their contraction and churn, and divides by the starting figure. New customers signed during the period are left out. Gross revenue retention is the related measure that ignores expansion and only counts what was kept.

## Example

A company's customers at the start of the year pay $1,000,000 in ARR. During the year those same customers add $200,000 in upgrades, downgrade by $50,000 and cancel $100,000. Their ARR is now $1,050,000, so NRR is 105 percent. Revenue from customers signed during the year is not included.

## Related terms

-   [Churn Rate](/glossary/churn-rate)
-   [Monthly Recurring Revenue (MRR)](/glossary/monthly-recurring-revenue)
-   [Annual Recurring Revenue (ARR)](/glossary/annual-recurring-revenue)
-   [Customer Lifetime Value (CLV)](/glossary/customer-lifetime-value)

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