Net revenue retention (NRR)

What does Net revenue retention (NRR) mean?

Net revenue retention (also called net dollar retention) compares the recurring revenue from a group of customers today with the revenue from the same customers a year ago. It counts upgrades, subtracts downgrades and churn, and ignores new customers. Example: customers who paid 100 of ARR a year ago now pay 110, after 18 of expansion, 3 of downgrades and 5 of churn, so NRR is 110 percent. Above 100 percent, the company grows even if it wins no new customers. Gross revenue retention (GRR) is the same idea without the upgrades, so it can never exceed 100 percent; here it would be 92 percent.