Definition
NRR starts with revenue from last year's cohort, adds upgrades and cross-sells, subtracts churn and downgrades. Above 100% means the business grows even with zero new sales - the signature of product-market fit compounding.
Why it matters
Investors price NRR aggressively because it predicts durability; operators should love it for the same reason - it exposes whether growth is real or treadmill.
Formula
(Starting MRR + Expansion - Churn - Contraction) / Starting MRR
Benchmarks
110%+ excellent for B2B SaaS; below 90% demands retention surgery
All glossary terms