Metric guide · Revenue
Net revenue retention (NRR)
Short answer
Net revenue retention, or NRR, measures how much recurring revenue a group of existing customers generates now compared with 12 months ago. Take the ARR those customers had at the start, add expansion, subtract contraction and churn, then divide by the starting ARR. Revenue from customers acquired during the year is excluded.
The formula
NRR = (starting ARR + expansion − contraction − churned ARR) ÷ starting ARR × 100
Unit: Percent. Better when it goes up.
How to calculate it
- List every customer paying at the start of the 12-month window and record their ARR.
- Find the current ARR of those same customers, treating customers who left as zero.
- Divide the current ARR of that group by its starting ARR and multiply by 100.
- Exclude any customer who first paid during the window.
Mistakes that distort it
NRR only follows the starting group of customers. Adding revenue from customers acquired later turns it into a growth rate.
Gross revenue retention ignores expansion and cannot exceed 100%. NRR includes expansion and can exceed 100%.
Quarterly or monthly NRR figures are not comparable with a 12-month figure. State the window alongside the number.
Where Sondola reads it from
Sondola reads this metric from Typed in, with the source and period on every reading. Each reading keeps where it came from, the period and the date it was recorded, and you can download all of it at any time.
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What does NRR above 100% mean?
It means expansion from existing customers more than offset what was lost to contraction and churn over the year. The group grew without any new customers.
Is NRR useful for consumer subscription apps?
It is less common because most consumer plans have little room for expansion. Subscriber churn and retention by signup month usually tell a consumer app more.
Related metrics
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