Net revenue retention (NRR) and gross revenue retention (GRR) both measure how much recurring revenue you keep from existing customers over a period, usually a year. The difference is expansion: NRR counts upsell, cross-sell and price increases; GRR does not. That is why NRR can go above 100% and GRR never can.
Read together, they answer two different questions. GRR asks whether customers stay. NRR asks whether the customer base grows on its own. Here is how to calculate both, what good looks like and where the numbers usually go wrong.
The formulas
Start with the recurring revenue (ARR or MRR) from customers who were already customers at the start of the period. New customers signed during the period are left out of both metrics.
- GRR = (starting revenue − churn − contraction) ÷ starting revenue
- NRR = (starting revenue − churn − contraction + expansion) ÷ starting revenue
Churn is revenue from customers who left. Contraction is revenue lost from customers who stayed but downgraded, removed seats or got a discount. Expansion is new revenue from existing customers: more seats, more products, higher prices.
A worked example
You start the year with $1,000,000 in ARR from existing customers. Over the year:
- customers worth $60,000 churn;
- customers who stay downgrade by $30,000 in total;
- customers who stay expand by $120,000 in total.
GRR = (1,000,000 − 60,000 − 30,000) ÷ 1,000,000 = 91%.
NRR = (1,000,000 − 60,000 − 30,000 + 120,000) ÷ 1,000,000 = 103%.
The story behind the numbers: you lost 9% of your base, and expansion more than made up for it. A board will like the 103%. A good CS leader will ask why 9% walked out, because expansion can slow down next year and churn rarely does on its own.
NRR vs GRR: which one matters more?
Both, for different readers. NRR is the number investors quote because it shows whether growth compounds without new logos. GRR is the number that tells you whether the product and the CS motion actually keep customers. A high NRR can hide a leaky bucket when a few large accounts expand; GRR cannot be flattered that way.
For a customer success team, GRR is the cleaner measure of its own work. It moves when fewer customers churn and downgrade, which is exactly what health scoring and proactive plays are for.
What is a good NRR and GRR?
Public benchmarks for private B2B SaaS companies cluster around a GRR of about 90% and an NRR just above 100%:
- The KeyBanc Capital Markets and Sapphire Ventures private SaaS survey (15th edition, October 2024) reports gross retention of about 90% and net retention of about 101%, both expected to stay roughly stable.1
- SaaS Capital's 2025 retention benchmarks put median NRR at 102% for companies with an average contract value of $25,000–$50,000, with the top quartile at 111% and the bottom quartile at 97%. Companies with NRR of 110% or more grew faster than the 24% median growth rate of the sample.2
Benchmarks depend heavily on contract size and segment: companies selling large annual contracts to enterprises usually retain more than those selling monthly plans to small businesses. Compare yourself with companies of similar contract value, and track your own trend quarter by quarter. That trend matters more than any single industry figure.
Common calculation mistakes
- Including new customers. Revenue from logos signed during the period belongs in new bookings, not in retention.
- Counting price increases in GRR. Price uplifts are expansion. Put them in NRR only.
- Mixing up logo and revenue retention. Losing 5% of customers is not the same as losing 5% of revenue. Report both if you need to, but label them.
- Inconsistent periods. Compare the same cohort at the start and end of the same period, for example December to December, and stick to it.
- Netting contraction against expansion inside one account. If an account drops one product and adds another, record both movements so GRR still shows the contraction.
How customer success moves GRR
Churn and contraction rarely come out of nowhere. They show up first as quieter engagement, falling adoption and a pile of support cases, usually months before the renewal date. A customer health score turns those signals into a ranked list, and plays that start when health drops make sure someone acts in time. That is the lever a CS team actually controls, and GRR is where it shows up.
Frequently asked questions
What is the difference between NRR and GRR?
Both measure recurring revenue kept from existing customers over a period. NRR includes expansion such as upsells, cross-sells and price increases, so it can exceed 100%. GRR excludes expansion and only subtracts churn and contraction, so it can never exceed 100%.
How do you calculate net revenue retention?
Take recurring revenue from customers who existed at the start of the period, subtract churn and contraction, add expansion, and divide by the starting revenue. For example, $1,000,000 − $60,000 churn − $30,000 contraction + $120,000 expansion gives $1,030,000, which is an NRR of 103%.
Can gross revenue retention be over 100%?
No. GRR only subtracts revenue lost to churn and contraction from the starting revenue, so 100% is the maximum: it means no customer left or downgraded.
What is a good NRR for a B2B SaaS company?
Public benchmarks put the median for private B2B SaaS at roughly 101–102%. SaaS Capital's 2025 data shows a top quartile of 111% for companies with $25,000–$50,000 average contract values, and companies at 110% or more grew faster than the median.
Is NRR the same as NDR?
Yes. Net dollar retention (NDR) and net revenue retention (NRR) are two names for the same metric, as are gross dollar retention (GDR) and gross revenue retention (GRR).
1 KeyBanc Capital Markets and Sapphire Ventures, 15th annual Private SaaS Company Survey, press release of 22 October 2024 (sapphireventures.com).
2 SaaS Capital, 2025 SaaS Retention Benchmarks for Private B2B Companies, September 2025 (saas-capital.com). Retention measured on December 2024 vs December 2023 MRR.