Net Revenue Retention (NRR)
The percentage of revenue retained from existing customers after accounting for churn, downgrades, and upgrades.
Definition
NRR (also called net dollar retention) measures how much revenue from existing customers grows or shrinks over time. NRR above 100% means expansion revenue exceeds churn — you grow even without new customers. Top SaaS companies achieve 120-150% NRR. Formula: (Starting MRR + Expansion - Contraction - Churn) ÷ Starting MRR × 100.
Why it matters for founders
NRR above 100% is the most powerful growth lever in SaaS. It means your existing customer base grows automatically. Investors consider NRR the single best indicator of product-market fit and long-term viability.
Example
Starting MRR: $100K. Expansion: $15K (upgrades). Contraction: $3K (downgrades). Churn: $5K (cancellations). NRR = ($100K + $15K - $3K - $5K) ÷ $100K = 107%.
How Foundra helps
Foundra's Pricing & Packaging card helps you design tier structures that drive expansion revenue, and the Onboarding & Activation card reduces early churn that tanks NRR.
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Related terms
Churn Rate
The percentage of customers who stop using your product in a given period.
Monthly Recurring Revenue (MRR)
The predictable revenue your business generates every month from subscriptions.
Annual Recurring Revenue (ARR)
The annualized value of your recurring subscription revenue.
Lifetime Value (LTV)
The total revenue a customer generates over their entire relationship with your business.