NRR
Net Revenue Retention
A metric that measures how much revenue from existing customers has increased or decreased over a period.
In Simple Terms
NRR is a metric that shows how much revenue from existing customers has grown or shrunk over time. It factors in both the losses from cancellations and the gains from customers upgrading to higher-tier plans. It's mainly used in subscription-based businesses, like monthly services, to check how healthy their relationships with existing customers are.
Behind the Name
NRR combines three English words: "Net" (what's left once gains and losses are offset against each other), "Revenue" (income earned), and "Retention" (the act of keeping or holding on to something). Put together, they describe purely how much revenue a business is able to hold on to — the name reflects a focus on the change in revenue coming from a company's original customers.
Take a Closer Look!
NRR is a metric that shows how much a company's recurring revenue from existing customers — like monthly subscription fees — has been maintained or grown over a given period.
It's used to check whether a business can keep growing purely from its existing customers, without needing to acquire new ones.
Specifically, it focuses on recurring revenue rather than one-time sales, combining the negative changes from customers canceling or downgrading their plans with the positive changes from customers upgrading to higher-tier plans or increasing usage.
This makes it possible to capture, in a single number, whether the company's recurring revenue from its current customers has grown or shrunk compared to before.
If the gains from upsells and plan upgrades outweigh the losses from cancellations, the number comes out above 100%, meaning the business is growing even without adding new customers.
Put simply, it's treated as a key metric for analyzing customer satisfaction and business stability, especially for subscription-based businesses that charge monthly fees.