Net revenue retention is the same metric as net dollar retention — different name, identical math. Whether you encounter NRR or NDR depends mostly on who is talking: finance teams tend to say NRR, SaaS investors tend to say NDR, but they are reading the same number. It is the single most watched retention metric in modern subscription investing.
The formula
NRR = (Starting MRR − Churned MRR − Downgrade MRR + Expansion MRR) ÷ Starting MRR × 100
What is in the numerator: starting MRR from existing customers, minus what they churned, minus what they downgraded, plus what they expanded into through upsell, pack-size increases, or new add-ons.
What is not in the numerator: revenue from new customers acquired during the period. NRR is strictly about the starting cohort.
Why NRR can exceed 100%
When existing customers expand more than they churn or downgrade, NRR climbs past 100%. The business is compounding on its existing customer base alone — every retained customer is paying more this period than last. Best-in-class SaaS companies report 110-130% NRR; the exceptional ones reach 140%+.
What NRR tells you that other metrics do not
- Versus churn rate alone: Churn shows losses; NRR shows net effect including expansion.
- Versus growth rate: Growth includes new customer acquisition; NRR isolates what existing customers did.
- Versus LTV: LTV is a per-customer lifetime projection; NRR is a per-period actual.
NRR is the cleanest measure of how the existing book of business is performing as a self-contained unit.
Benchmarks and how to read them
- SaaS best-in-class: 130-150% NRR.
- SaaS healthy: 110-130% NRR.
- SaaS warning: Under 100% NRR.
- Shopify subscription: Less standardly reported; applying the same math, healthy stores can see modest NRR above 100% if upsell or pack-size expansion is meaningful.
Always read NRR alongside gross revenue retention. A high NRR with weak GRR is expansion-dependent and brittle. See net dollar retention and gross revenue retention.