What It Means (Simple Explanation)
Net Revenue Retention (NRR) shows how much your revenue from existing customers grows—or shrinks—over time. It accounts for expansion (upgrades), contraction (downgrades), and churn (losses).
Example
If you start the month with $1M in revenue from existing customers and end with $1.1M (after upgrades and churn), your NRR is 110%.
Why This Matters (To SaaS & Finance Teams)
NRR tells you if your product is delivering real, ongoing value. A high NRR means customers stick around and even spend more. A low one? You’ve got a retention problem—that could be caused by product feature gaps, a bad customer experience, or a weak value proposition .
Ordway helps you track NRR accurately by syncing billing, contract changes, and customer lifecycle data inside its subscription platform. No spreadsheet gymnastics needed.
How It Works (Break It Down Simply)
There are multiple ways to calculate NRR, but the most common is
NRR = (Starting ARR + Expansion – Contraction – Churn) / Starting ARR × 100
- Start with current customers only (ignore new ones)
- Add revenue from upgrades (expansion)
- Subtract losses from downgrades and cancellations
- Divide by starting ARR
If NRR is above 100%, your base is growing without new sales.
Common Headaches
- Forgetting to exclude new customers from the equation
- Churn and downgrades offsetting hard-won upgrades
- Inaccurate billing data or manual tracking
Ordway gives you real-time visibility into NRR—broken down by plan, segment, or region.
Best Practices
- Segment NRR by plan type, product line, or customer cohort
- Track it monthly, quarterly, and yearly
- Pair it with gross revenue retention (GRR) for full picture
- Watch NRR closely after pricing changes or new feature launches
- Use billing system data, not just CRM numbers
When to Use NRR
Use NRR when reporting on customer value, evaluating growth efficiency, or prepping for investor meetings. It tells the true story behind retention.
KPI Impact / What It Affects
NRR helps investors understand growth rates for the install base, the impact of churn, and the customer success teams ability to land and expand. High NRR means you’re expanding revenue even without new sales.
From the SaaS Trenches
Ordway’s Net Revenue Retention Guide explains how to improve NRR by fixing pricing, catching churn early, and encouraging plan upgrades with billing workflows that actually reflect usage.
FAQ Section (Quick Answers to Real Questions)
What is Net Revenue Retention?
The revenue you keep and grow from existing customers over time.
What’s a good NRR?
100% is solid. 120%+ means you’re growing fast.
Does NRR include new customers?
No—only existing customer revenue.
How’s it different from Gross Revenue Retention?
GRR excludes upgrades. NRR includes them.
Want to Go Deeper?
See how Ordway helps SaaS teams boost NRR by tracking real expansion and churn signals. Request a demo
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