Net revenue retention (NRR) — also called net dollar retention (NDR) — is the percentage of recurring revenue retained from your existing customers over a period, including expansion and after subtracting downgrades and churn. Crucially, it excludes new customers. An NRR above 100% means your existing base grows revenue on its own, before you sell anything new — the hallmark of a durable SaaS business.
How to calculate NRR.
Take a cohort of customers as of the start of the period and track only their revenue:
(Starting MRR + Expansion − Contraction − Churn) ÷ Starting MRR × 100
Two rules keep it honest: exclude new customers acquired during the period (that's growth, not retention), and state the window — NRR is usually measured over 12 months.
NRR vs GRR. Gross revenue retention (GRR) uses the same base but excludes expansion, so it can never exceed 100% — it measures pure leakage. NRR includes expansion, so it can exceed 100%. Report both: GRR shows how leaky the bucket is; NRR shows whether expansion more than refills it.
NRR example.
Start with $50,000 MRR from existing customers over 12 months:
- Starting MRR (existing customers)
- —
- $50,000
- + Expansion MRR
- —
- +$8,000
- − Contraction MRR
- —
- −$1,500
- − Churned MRR
- —
- −$3,500
- Ending MRR (same cohort)
- —
- $53,000
- NRR
- $53,000 ÷ $50,000
- 106%
- GRR (excl. expansion)
- $45,000 ÷ $50,000
- 90%
NRR of 106% means this cohort grew revenue 6% without a single new customer — even though gross retention was only 90%.
Why NRR matters for attribution.
NRR is one of the strongest signals of long-term customer quality — and it varies dramatically by acquisition channel. A channel that brings customers who expand can have NRR well above 100%, making each customer worth far more than their CAC suggests. Another channel might acquire at the same cost but produce customers who downgrade and churn, dragging NRR below 100%.
You only see that difference when NRR is measured per acquisition source. Signal Sparrow ties cohort retention and expansion to the channel that acquired each customer, so revenue attribution reflects not just who converts, but who keeps paying and grows — the channels that compound.
