Net Revenue Retention

Net revenue retention (NRR) shows what percentage a customer cohort's recurring revenue reached over time, counting expansion, contraction and churn together.

NRR is the most important subscription-revenue health metric, because it collects all the forces within an existing cohort into one number: how much you churned, how much you contracted and how much you expanded, all excluding new customers. NRR's signature property is that it can exceed one hundred percent: if expansion of good customers outweighs churn and contraction, a cohort's revenue grows without any fresh customers, a state called negative churn and a sign of a very healthy product. But that same crossing of one hundred can be dangerous if read alone: an NRR above one hundred can hide runaway churn of small customers under the expansion of a few large ones, so it must always be read beside gross retention and logo churn. Like all this family, NRR comes from the billing system.